Real Estate

Realty stocks gain on Maharashtra levy largesse

Our Bureau Mumbai | Updated on January 07, 2021

Move may result in price correction of 3-4 per cent across industry, says JMFL

Real estate stocks gained on the stock market on Thursday after the Maharashtra cabinet cleared a proposal to cut government levies on real estate by 50 per cent until December 31, 2021.

At 10:24 am, Nifty Realty was up 6.95 points or 2.18 per cent to 325.55 points. The S&P BSE Realty Estate index was at 2,573.70 points, up 55.41 points or 2.20 per cent. The index opened at 2,589.54 points against the previous day’s close of 2,518.29 points.

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Premiums vary based on location, ready reckoner rate, approval costs and project layout but broadly constitute close to 18 per cent of the project cost for a mid-income housing project in Mumbai, said domestic brokerage JMFL.

The stock of Indiabulls Real Estate was up nearly 9 per cent and that of Sobha Ltd 4.61 per cent. The stocks of Mahindra Life and Sunteck were up 3.97 per cent and 3.78 per cent respectively.

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Godrej Properties, Brigade Enterprises, Phoenix Mills and Oberoi Realty were up 2 per cent: Prestige Estates and DLF were up 1.50 per cent and 0.87 per cent respectively.

Those projects that avail of these concessions will have to pay full stamp duty on behalf of the customers, a press statement issued by the Chief Minister’s office said.

“We believe this is a positive step from the State government and can possibly result in price correction of 3-4 per cent across the industry,” JMFL added.

“Going forward, we expect supply side to also pick up following the cut in premiums and transaction volumes to remain at an elevated level,” it further said.

According to JMFL, the other factors that would aid this recovery would be: discounts/schemes being offered by developers; low home loan rates and demand for upgrading homes.

Published on January 07, 2021

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