Among the top intraday losers were Lodha Developers and Prestige Estates Projects, whose shares declined 10% and 8%, respectively. Others like Godrej Properties, DLF, Sobha, Oberoi Realty, The Phoenix Mills, Signatureglobal (India), and Brigade Enterprises also fell up to 7%.
One expectation from this year’s budget was an increase in the cap on deduction towards interest paid on home loans u/s 24(b) for self-occupied property, from the current Rs 2 lakh to Rs 3-5 lakh.
While this remains a longstanding industry demand, brokerage Nuvama Institutional Equities sees that happening this time. It is believed to positively impact the real estate sector by boosting demand in the affordable and mid-income housing segment.
The other expectation concerned a redefinition of affordable housing.
Nuvama also expected the government to redefine ‘affordable’ in terms of price band or unit size to attract a reduced 1% GST rate on the sale of under-construction property. “The change would provide a stimulus to housing demand,” it said in a budget note.Bhavya Bagrecha, Fund Manager at Bharat Bhoomi Fund, said that the current cap on affordable housing is at Rs 45 lakh, which should be increased to Rs 75–85 lakh for metro cities like Mumbai and Delhi-NCR, and Rs 60–65 lakh for non-metros. “It is virtually impossible to find a home within the Rs 45 lakh limit in major urban centers, rendering many buyers ineligible for affordable housing benefits like lower GST rates,” she added.Another demand pertained to the extension of the time limit and the deduction amount u/s 80EEA. While Nuvama opined that the move could give a fresh impetus to the affordable housing segment if implemented.
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REITs rise up to 3%
Brookfield India Real Estate Trust touched the day’s high of Rs 361.99 on the NSE, gaining 2.6%, while Nexus Select Trust climbed nearly 3%. Embassy Office Parks REIT shares were up 1% while Mindspace Business Parks REIT traded flat, though the bias was negative.
Finance Minister Nirmala Sitharaman today said that the government will continue to focus on developing infrastructure in cities with over 5 lakh population (Tier II and Tier III), which have expanded to become growth centres. She proposed to accelerate the recycling of significant real estate assets of CPSEs through the setting up of dedicated REITs.
“During this past decade, our Government has undertaken several initiatives for large-scale enhancement of public infrastructure, including through new financing instruments such as Infrastructure Investment Trusts (InVITs) and Real Estate Investment Trusts (REITs) and institutions like NIIF and NABFID,” Sitharaman said in her budget speech.(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
