Real estate stocks such as Godrej Properties and Oberoi Realty rose up to 7% in early trade today after Maharashtra government on Wednesday gave nod to a proposal to reduce levies on real estate by 50% until December 2021. The move is likely to lead to reduction in prices of houses in the state.
Reacting to the development, Godrej Properties share climbed 4.5% to Rs 1,527, a fresh 52 week high, against previous close of Rs 1,460. Stock of Indiabulls Real Estate rose 5.86% to Rs 83 in early trade against previous close of Rs 78.40.
Share of another real estate player Oberoi Realty rose 6.88% to Rs 628, a fresh 52-week high, against previous close of Rs 587.55. Share of Sunteck Realty too gained 6.34% to Rs 369 in early trade against previous close of Rs 347.30.
BSE realty index too rose 89 points or 3.53% to 2,607 against previous close of 2,518.29 on BSE. The move will lead to a reduction of several premiums that builders have to pay as part of development of a project.
Mani Rangarajan, Group COO, Housing.com, Makaan.com and Proptiger.com said, "Reduction in real estate premiums by 50% in Maharashtra will provide a further boost to the sector in the state. After being hit by the pandemic, the realty market has seen an uptick in the state post stamp duty cut by Maharashtra govt and interest rate status quo by RBI in last four months. The reduction in premiums would help the Mumbai market as the city collected as many as 22 premiums under various heads, which is higher than other top cities. High premium puts a financial burden on developers leading to higher costs for the homebuyers. In the current economic scenario, the step would ease the burden and soften the prices resulting in more sales in the coming months. We look forward to further extension of stamp duty waiver for next few months to revive the demand."