You are here: Home » Markets » News
Business Standard

Nifty Realty index surges nearly 3%; DLF, Prestige Estates advance 5% each

Pick-up in demand and supportive measures from the government have aided in revival of sentiments for the sector.

Topics
Nifty Realty | Buzzing stocks | Real estate stocks

SI Reporter  |  Mumbai 

mumbai, cty, developers, construction, realty, reality, buildings, highrise
On November 12, Finance Minister Nirmala Sitharaman announced a new set of stimulus measures to boost the sector.

Shares of real estate companies were in focus with the index gaining nearly 3 per cent on the National Stock Exchange (NSE) on Thursday on the expectation of revival of the real estate sector.

and Projects rallied 5 per cent each and Godrej Properties gained 4 per cent, while Sobha, Indiabulls Real Estate and Brigade Enterprises were up in the range of 2 per cent to 3 per cent on the NSE.

At 10:13 am, the index, the top gainer among sectoral indices, was up 2.98 per cent, as compared to a 0.11 per cent gain in the Nifty50 index.

In the July-September quarter (Q2FY21), the residential segment displayed a strong recovery and continued momentum is likely to aid overall cash generation. The reopening of the economy is likely to boost the retail and hospitality segment, albeit gradually.

Low home loan rates and discounts/ attractive offers for residential homes have pushed sales velocity in the current quarter. Even while the volumes are yet to catch up to the pre-Covid levels, the spurt has been instrumental in perking up sentiments, according to a report by Knight Frank.

Meanwhile, on November 12, Finance Minister Nirmala Sitharaman announced a new set of stimulus measures to boost the sector. The government announced relaxations in income tax rules to allow the sale of primary residential units of up to Rs 2 crore values below the circle rate. Till now, only a 10 per cent difference between the circle rate and the agreement value was allowed.

This measure will reduce hardships faced by both home-buyers and developers and help in clearing the unsold inventory. The additional Rs 18,000 crore spending under Pradhan Mantri Awas Yojana (PMAY) will help funding for stuck housing projects.

“With the softening of prices across markets, this price difference was in excess of 10 per cent in some cases which kept some of the home buyers at bay. The move will certainly help the real estate sector liquidate inventory as it brings more home buyers to the fore, the impact will be limited as unsold inventory is highest in Mumbai and NCR where properties values are higher than Rs 2 crore,” said Sharad Mittal, CEO & Head, Motilal Oswal Real Estate.

Rajani Sinha, Chief Economist and National Director – Research, Knight Frank said, “With the economy unlocking, macro-economic parameters have started improving. Real estate sector has also started bouncing back in line with overall pick-up in the economy. Supply, as well as demand parameters, have improved for the real estate sector and that is getting reflected in the improvement in the stakeholders’ sentiments. Pick-up in demand and supportive measures from Reserve Bank of India (RBI) and the government have aided in the revival of sentiments for the sector.”

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, November 19 2020. 10:31 IST
RECOMMENDED FOR YOU
.