Realty stocks continue to move up in weak market

MUMBAI: The S&P BSE Sensex gained momentum for second consecutive session even as the market was witnessing post-budget profit booking.

The Finance Minister Arun Jaitley in his budget speech brought relief to the sector by announcing a series of positive measures and allocations such as relaxation in FDI, REITs, smart cities development and incentives for affordable housing.

The government allocated Rs 7,060 crore for the development of 100 smart cities, a reduction in the size of projects eligible for FDI from 50,000 sq metres to 20,000 sq metres. It halved the minimum investment limit for FDI to $5 million.

The minister allocated Rs 4,000 crore to affordable housing for the urban poor through the National Housing Bank (NHB).

India Ratings & Research expects the proposals in the Union Budget 2014-15 to boost end-user demand for housing and improve funds availability to the real estate sector.

“End-user demand is likely to be stimulated by the proposed increase in tax deduction for home loan payments on self-occupied houses,” said Vinay Betala, Senior Analyst, India Ratings & Research.

“Demand for residential real estate may also pick up as the monthly outflow required would reduce for prospective buyers. This of course assumes that real estate prices remain at current levels,” Betala added.

At 11:20 a.m.; The BSE Realty Index was up 0.73 per cent on the BSE. It had surged over 5 per cent in previous session.

Prestige Estates was up 2.30 per cent, Oberoi Realty gained 1.52 per cent, Sobha Developers moved 1.48 per cent higher and DB Realty gained 1.09 per cent.