Shares of ten real estate companies dropped 0.2% to 7.3% at 14:27 IST on BSE, with these stocks reversing Thursday's gains triggered by the Finance Minister announcing favorable measures for the sector in Union Budget 2014-15.
DLF (down 5.12%), HDIL (down 2.12%), Hubtown (down 5.48%), Indiabulls Real Estate (down 6.62%), Prestige Estates (down 2.26%), Parsvnath Developers (down 3.32%), D B Realty (down 4.24%), Unitech (down 7.3%), Sobha Developers (down 0.2%) and Godrej Properties (down 1.17%) edged lower.
The S&P BSE Realty index fell 3.67% to 1,935.99. It underperformed the Sensex, which was down 1.17% at 25,074.77.
The S&P BSE Realty index had underperformed the market over the past one month till 10 July 2014, falling 8.2% compared with 0.82% fall in the Sensex. The index, however, outperformed the market in past one quarter, gaining 29.43% as against Sensex's 11.7% rise.
Realty shares were on a roll on Thursday, 10 July 2014. DLF (up 9.22%), Prestige Estates (up 6.86%), HDIL (up 5.25%), Indiabulls Real Estate (up 5.04%), Hubtown (up 0.5%), D B Realty (up 4.97%), Sobha Developers (up 2.73%), Phoenix Mills (up 2.31%), Parsvnath Developers (up 2.1%), Oberoi Realty (up 1.79%) edged higher. Unitech fell 0.71%.
Gains in realty shares on Thursday, 10 July 2014 were triggered by the finance minister saying in the Union Budget 2014-15 presented in Lok Sabha on Thursday, 10 July 2014 that the government will provide tax incentives for Real Estate Investment Trusts (REIT) and hiked the deduction limit on interest on housing loan in respect of self occupied house property from Rs 1.5 lakh to Rs 2 lakh.
Jaitley proposed setting up a Mission on Low Cost Affordable Housing to be anchored in the National Housing Bank. A sum of Rs 4000 crore has been earmarked for National Housing Bank with a view to increase the flow of cheaper credit for affordable housing to the urban poor/EWS/LIG segment.
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Jaitley said that the Rural Housing Scheme has benefited a large percentage of rural population who have availed credit through Rural Housing Fund (RHF). In the light of the above, enhanced allocations to the tune of Rs 8000 crore has been made for National Housing Bank (NHB) for the year 2014-15 to expand and support Rural Housing in the country.
To encourage development of Smart Cities, requirement of the built up area and capital conditions for foreign direct investment (FDI) is being reduced from 50,000 square metres to 20,000 square metres and from $10 million to $5 million respectively with a three year post completion lock in. To further encourage this, projects which commit at least 30% of the total project cost for low cost affordable housing will be exempted from minimum built up area and capitalization requirements, with the condition of three year lock-in.
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