Real estate stocks may move up

Nine real estate developers rose 1.62% to 4.19% after Finance Minister Pranab Mukherjee announced sops for the housing sector on Monday, 27 July 2009.

At 9:58 IST, the BSE Realty sector was up 2.16% at 3,993.16. It outperformed the Sensex, which was up 0.28% at 15,418.24.

Mahindra Lifespace Developers (up 4.19%), Ansal Properties & Infrastructure (up 3.83%), Parsvnath Developers (up 2.89%), Omaxe (up 2.86%), Unitech (up 2.33%), DLF (up 2.26%), Housing Development and Infrastructure (up 2.02%), Phoenix Mills (up 1.97%), and Sobha Developers (up 1.62%), 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%.

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.

Mr 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.