Home sales soar to 15-year high, driven by strong mortgage loan demand, says Envision Capital

The real estate space is showing signs of a significant revival, emerging from a long period of stagnation. Home sales have reached a 15-year high, indicating a resurgence in demand for residential properties. This positive trend in the real estate market bodes well for the overall economic recovery and is likely to have ripple effects on related industries.

In an interview with CNBC-TV18, Nilesh Shah, MD and CEO of Envision Capital discussed the current state of the real estate sector and shared his insights on the performance of some key stocks in the portfolio.

The surge in real estate sales has been complemented by a robust demand for mortgage loans. Shah emphasised that the demand for mortgage financing is remarkably strong, which further supports the notion of a recovering housing market. The availability of easy credit and attractive interest rates is likely to fuel the housing demand and stimulate the broader economy.

"We think the entire residential property market and home improvement is currently booming. Demand for mortgage loans is very strong. About a fortnight back JLL (a prominent company that focuses on providing professional services in real estate and investment management) came out with a report which said that sales of homes are up 21 percent year to date, from January to June, and homes sales are at a 15-year high and that is translating to strong demand," Shah said.

When discussing the investment strategy, Shah revealed that Envision Capital has a long-standing position in Kolte Patil, a prominent real estate developer. Furthermore, the recent addition to the portfolio was Stylam Industries, a company known for its innovative laminate products.

Additionally, Envision Capital has held shares of Polycab, a leading electrical cables manufacturer, for three years. Shah expressed optimism about the company's prospects, predicting that it would deliver strong performance and maintain healthy profit margins.