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Stocks In Real estate

Stocks In Real estate

Real estate stocks took a beating on Thursday afternoon as the interim Budget 2024 did not include any big bang announcements. Shares of prestige Estates Ltd fell 2.75 per cent; Sobha Ltd, Oberoi Realty, Godrej Properties and The Phoenix Mills Ltd were some of the top losers for the BSE Real Estate index that fell 1.35 per cent to 6,675.21.

Puri stated that the allocation for Capex outlay has increased by 11.1 percent to Rs 11,11,111 lakh crore, representing 3.4 percent of GDP. He highlighted that this increase will unlock the potential for real estate development across assets, as the majority of this allocation will fund various infrastructure upgrades and new projects.

Anuj Puri, Chairman – ANAROCK Group said the Interim Budget 2024 made no big-bang announcements, but it continued its focus on infrastructure upgrades and building connectivity across the country. This, he said, should benefit real estate growth in not just the top cities but in tier 2 & 3 cities across the country.

Types of Real Estate Stocks

Continuing the implementation of PM Awas Yojana (Gramin), the target of close to 3 crore houses was achieved. The plan now sets its sights on taking up an additional 2 crore houses in the next five years.

Finance Minister Nirmala Sithraman also suggesting launching of a scheme to help deserving sections of the middle class, living in rented houses or slums, or chawls and unauthorized colonies, to buy or build their own houses. “This is likely to free encroachment areas like slums for easier redevelopment,” Puri said.

Shishir Baijal, Chairman and Managing Director, Knight Frank India said the intention to complete 2 crore housing units in the next five years will aid the ‘Housing for All’ mission of the government. Additionally, the proposed boost to housing for the middle-class living in sub-par accommodation is also a welcome inclusion.

Analysis of Real Estate Investment Trusts (REITs)

“We look forward to the details of this as we expect this to have great long-term ramifications. Further, the enhanced focus on domestic tourism development will provide a fillip to the hospitality industry,” he said.

“Transit oriented development in urban areas – this may give a boost to housing demand in cities and lead to rise in residential prices, especially in peripheral areas and tier 2 and tier 3 cities. Development of iconic tourist centres is likely to favourably impact the hospitality sector with hotels and restaurants across categories. Moreover, long-term loans are proposed to states for tourism. Extending tax benefit to startups for another year may help the office real estate to rejuvenate,’ he said.

Meanwhile, on the unmet expectations, Puri said. The industry had been requesting industry status for years, believing it would unlock benefits like easier access to credit, tax breaks, and infrastructure development. This wasn’t explicitly addressed in the interim budget.

Expectations included tax incentives for homebuyers, such as an increase in the deduction limit on home loan interest under Section 24. The interim budget remained silent on this as well.

Besides, boosting allocations for schemes like PMAY (Urban) to improve affordability and encourage new projects in this segment was a key expectation. No major announcements appeared in the interim budget regarding this either.

“While the interim budget didn’t directly address the real estate sector’s key demands, the upcoming Union Budget might hold more concrete measures addressing industry concerns and potentially impacting market trends,” Puri said.


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