Real estate stocks corrected on the Budget Day with Nifty Realty being the top sectoral loser, falling over 1 percent amid FM's Budget Speech. Prestige Estates and Macrotech Developers, listed as Lodha, led the losses, falling up to 2 percent.
Sobha, Brigade Enterprises, Oberoi Realty, Godrej Properties and DLF fell up to 1 percent.
The loss comes even as the allocation for PMAY was announced at Rs 80,671 crore from Rs 54,103 crore in the previous budget, up 49 percent on-year. The previous Budget had seen the allocation go up by a whopping 66 percent year-on-year.
FM announced that Awas Yojana Grameen is close to achieving 3 crore houses. "Another 2 crore houses will be taken up in the next 5 years," she said.
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Industry insiders hope that PMAY, which was extended to December 2024, be extended further to December 2025. Overall, real estate analysts believe that the segment will continue its bullish trend from 2023 through the calendar year 2024 because of the healthy macroeconomic outlook and an upbeat job market. The industry expects infrastructure development, lower borrowing costs, and tax reforms to spur growth and investment, fostering a sustainable real estate environment.
Industry insiders had also wanted the government to incentivise rental housing for the low-income segment, by introduce a 100 percent exemption for rental income up to Rs 3 lakh for houses costing up to Rs 50 lakh.
Real-estate experts told Moneycontrol that this would incentivise investors to rent out properties and augment the supply of rental accommodation in this income category, which has been facing a housing shortage.
They also wanted home purchases to be made more tax-efficient. Under section 54 of the Income Tax Act, long-term capital gains from sales of existing house can be utilised in buying or constructing a new property. If the investment for exemption is done through an under-construction property, it can be claimed only if the construction of the property is completed within three years of sale of the earlier house.
In an earlier interaction with Moneycontrol, Shishir Baijal, Chairman and Managing Director, Knight Frank India said that the completion timeline of under-construction properties should be extended to five years instead of the existing three.
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