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Nifty realty index hit 11-year high, sector likely to do well in next two quarters

The sales of the top real estate companies have increased in last one year mainly on account of lower interest rates, state government initiatives like reduction of stamp duty in some states and implementation of RERA

September 23, 2021 / 12:16 PM IST
Nifty
The real estate sector has stood its ground despite all the odds. The Nifty realty index has gained about 22 percent in last one month and about 45 percent this calendar year - one of the best performing indices on NSE. More interestingly, the index crossed the decade-high level. According to Jay Prakash Gupta, Founder, Dhan, realty sector hit an 11 year high of 456.15. The sales of the top real estate companies have increased in last one year mainly on account of lower interest rates, state government initiatives like reduction of stamp duty in states like Maharashtra and transparency in the real estate sector due to implementation of RERA.
Sector Outlook: "If I analyse the sector from the current scenario, where lower Interest rate, and continued support of state governments are favorable tailwinds, the sector is likely to do well in next two quarters. Karnataka Government has announced reduction in stamp duty on property registration from 5% to 3%, which is again a positive news for Real Estate. With Festival Season setting in, such incentives from the Government along with low Interest rates will favor Real Estate stocks like Oberoi Realty, Godrej Property and Prestige. These companies have strong financials and are trusted names in the Real Estate space. However, risks related to 3rd wave of Covid19, Fed announcement of Tapering resulting in rise of interest rates, contagion effect from China's Evergrande crisis could derail the rally if it happens." Jay Prakash Gupta, Founder, Dhan
Sector Outlook: "If I analyse the sector from the current scenario, where interest rates are lower, and state governments are supportive, the sector is likely to do well in next two quarters. The Karnataka government has announced reduction in stamp duty on property registration from 5% to 3%, which is again a positive news for real estate. With festival season setting in, such incentives from the Government along with low Interest rates will favour real estate stocks like Oberoi Realty, Godrej Property and Prestige. These companies have strong financials and are trusted names in the space. However, risks related to 3rd wave of Covid19, US Fed announcement of tapering which could result in rise of interest rates, contagion effect from China's Evergrande crisis could derail the rally if it happens." Jay Prakash Gupta, Founder, Dhan
Over the decades, 6 stocks from the sector turned multibaggers, in fact the stocks like Godrej Properties, Brigade Enterprises and The Pheonix Mills have gone 4 times during this period. Indiabulls Real Estate was the only stock that gave negative return during this period.
Over the decades, 6 stocks from the sector turned multibaggers, in fact the stocks like Godrej Properties, Brigade Enterprises and The Pheonix Mills have gone 4 times during this period. Indiabulls Real Estate was the only stock that gave negative return during this period.
first published: Sep 23, 2021 12:16 pm

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