Post-Budget 2017, Real Estate Stocks Zoom

As the Union Minister for Finance doled out sops to the real estate sector in his Budget Speech, including infrastructure status to affordable housing, realty stocks in the country soared 20 per cent. 

Plagued low demand and high debt, the otherwise subdued industry got a much-needed thrust after Arun Jaitley announced tax sops for developers who have had a large inventory overhang. 

On the Bombay Stock Exchange, the shares of realty majors such as DLF surged 6.74 per cent, Godrej Properties spiraled 5.13 per cent up, HDIL by 5.84 per cent, Oberoi Realty by 6.38 per cent, Indiabulls Real Estate Ltd by 2.7 per cent and Prestige Estates Projects jumped 4 per cent. Amid this upbeat mood, the BSE Realty index gained 4.8 per cent.

In the non-index stocks category, Ashiana Housing zoomed 19.99 per cent, Ansal Housing & Construction stocks surged 9.83 per cent and Ganesh Housing Corporation soared 9 per cent.

Housing finance companies also rallied behind the realty sector as their stocks too spiraled northwards marginally. The shares of HDFC rose 3.6 per cent while LIC Housing Finance settled for 2.78 per cent up.

All this led to an uptick in the real estate stocks and brought cheer for its shareholders.

With share prices having been depressed for a while now, investors and shareholders hope to consolidate their gains in the near future.

The finance minister also allayed the fears of investors by not tweaking the holding period of Long-Term Capital Gains Tax from the current one year to two or three years. 

Under the existing government norms, gains made on a listed company stock are tax-free if the investor exits after a year. 

Uday Shanker Mishra, a stockbroker, says, “As banks offer low returns, small-time investors turn to the stock market to make more money without forgetting the risks involved in the highly volatile market.”