The BSE Realty Index continues to lead the sectoral indices on the Bombay Stock Exchange on hopes of revival of new home sales post the Budget proposal for additional tax deduction for new home loan borrowers up to Rs 25 lakhs. Further, hopes of a rate cut by the central bank at its policy meet next week has also boosted sentiment.
The Budget has proposed an additional Rs 1 lakh tax benefit for first time home loan seekers borrowing up to Rs 25 lakh in financial year 2013-14. This is over and above the Rs 1.50 lakh tax benefit for interest repayment home loan borrowers get.
Dhiraj Relli, senior executive vice president branch banking head – south, HDFC Bank last week said, "Home loan enquiries have gone up after the Union Budget announcements. The conversions typically take 30-45 days from enquiry,”
He expects first time home loan borrowers may help increase loan offtake by 15-30 per cent in the next financial year. Though the ticket size may not be high as home prices in the state of Karnataka and in Bangalore are lower than in Mumbai or Delhi.
"Mid-cap housing segment will be in action post the Budget announcement. However, investors have started shifting to large cap realty stocks post the recent market rally. One can buy DLF in the large caps and Puravankara and Godrej Properties in the mid-cap segment" says Alex Mathew, Head-Research at Geojit BNP Paribas Financial Services.
At 12:10PM Unitech was the top gainer up 3.1%, DLF gained 2.4%, Indiabulls Real Estate rose 1.3%, Oberoi Realty was up 1.2% and Godrej Properties was up nearly 1%.
