Realty stocks rise on lending rate cut, sops
Realty stocks rose Monday after many banks pared their lending rates from the New Year. The Nifty Realty Index was up by about 7.25 per cent. DLF went up by 6.5 per cent on the NSE. Oberoi Realty was up 5.8 per cent, Godrej Properties was up 3.5 per cent, Sobha, up 2 per cent and Indiabulls Real Estate, up 7 per cent. Unitech soared 8.75 per cent, while HDIL went up 2.9 per cent.
Shares of Kolte-Patil Developers hit the upper circuit on the bourses after Crisil re-affirmed the investment grade rating on the firm’s loan facilities and other instruments. The scrip soared 19.95 per cent to hit upper circuit of Rs 99.80 on the NSE.
Significantly, prime minister Modi last Saturday had announced two new housing schemes for the urban poor. Under Pradhan Mantri Aawaz Yojana (PMAY) the poor and middle class in cities will get 4 per cent interest rebate on home loans up to Rs 9 lakh and 3 per cent on home loans up to Rs 12 lakh. Under PMAY, 33 per cent more houses will be built in villages. Home loans up to Rs 2 lakh will get 3 per cent exemptions for building a new house and also for renovation in villages, Modi had said.
“This is one of the largest cut in interest rates we have seen in the recent past and will improve eligibility of home buyers significantly. Though we have to be mindful of the reason for this cut as well. This is majorly due to huge deposits caused by demonetisation and will be impacted once liquidity leaves the banks post-relaxation in cash withdrawal limits, may be 6 months later. Hence home buyers should hurry up and lock this interest rates in the first half of the year only," said Ankur Dhawan, chief business officer, PropTiger.
Developers, are happy with the PM’s sops. JC Sharma, vice-chairman and managing director, Sobha, for instance, said, “This is a positive step in line with the government’s desire to revive the economy. The steep cuts announced in the home loans up to 90 basis points will be a shot in the arm for homebuyers as their borrowing costs will come down significantly and their affordability factor improves simultaneously. It is expected that the demand for homes will get a significant boost with this welcome step.”

ritwikmukherjee@mydigitalfc.com
Columnist: 
Ritwik Mukherjee
Tags: