Realty stocks tank after black money crackdown

BT Online   New Delhi     Last Updated: November 9, 2016  | 16:23 IST
Realty stocks tank after black money crackdown

Just hours after the Central government's move to withdraw Rs 500 and Rs 1,000 currency notes from circulation to clamp down on the black money menace, shares of realty companies saw large selling pressure as their business took a beating.

Shares of Godrej Properties, India Bulls Real Estate, DLF, Oberoi, Sobha, HDIL and Unitech were all down on Wednesday's trade.

"In the near term real estate companies will see slow down which could also impact housing finance companies in turn. However, real-estate sector which had witnessed large unsold inventory over the last few years would become relatively affordable and in the medium term HFCs could see growth picking up," said an Angel Broking Report.

The shares of DLF Ltd plunged nearly 20 per cent, IndiaBulls cracked 16.5 per cent while Unitech fell 19.8 per cent in intra day trade on the BSE.

Among other scrips, Prestige Estates Projects, that shed 17 per cent in intra day trade, closed 0.79 per cent down, Sobha Developers closed 4.94 per cent lower and Godrej Properties ended the day 2.52 per cent down.
 
According to experts, demonetisation of Rs 1,000 and Rs 500 notes are likely to hit unorganised builders and secondary (resale) property market. Housing prices could witness downward pressure, helping revive demand in this segment which is seeing sluggish trends.

However, analysts say it is a positive move for the real estate sector as it will bring back middle class people into the market.

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