Twelve real estate stocks rose 1.13% to 7.78% after the Reserve Bank of India kept key policy rates unchanged at their historically lowest levels at a quarterly monetary policy review today, 28 July 2009.
Currently, the reverse repo rate is at a historical low of 3.25% and the repo rate is at a record low of 4.75%
At 13:13 IST, the BSE Realty index was up 4.06% at 4,067.38. It outperformed the Sensex, which was up just 0.05% at 15,382.49.
Mahindra Lifespace Developers (up 7.78%), Unitech (up 5.80%), Housing Development and Infrastructure (up 4.72%), Phoenix Mills (up 4.07%), Anant Raj Industries (up 3.79%), DLF (up 3.49%), Ansal Properties & Infrastructure (up 3.05%), Sobha Developers (up 3.03%), Ackruti City (up 2.76%), Omaxe (up 1.56%), Orbit Corporation (up 1.34%), and Indiabulls Real Estate (up 1.13%), rose
The BSE Realty had outperformed the market over the past one month till 27 July 2009, soaring 16.12% as compared to the Sensex's 4.13% rise. It had also outperformed the market in the past one quarter, spurting 77.50% as against the Sensex rise of 35.20%.
The realty shares were also in demand as Finance Minister Pranab Mukherjee announced sops for the housing sector after trading hours on Monday, 27 July 2009.
To provide stimulus to the housing sector, tax holiday has been extended to real estate developers on profits derived from housing projects approved between 1 April 2007 and 31 March 2008, if such projects are completed on or before 31 March 2012.
Mukherjee also proposed an interest subsidy of 1% for home loans of upto Rs 10 lakh availed for houses worth upto Rs 20 lakh. The minister earmarked Rs 1,000 crore for this purpose and said it will also benefit the lower and middle income housing sector. The interest subsidy will be routed through scheduled commercial banks and housing finance companies registered with the National Housing Bank.
