Stock Market Hints at Good Times Ahead for Realty Players
After Housing and Urban Development Minister M Venkaiah Nadu spoke about cutting down on interest rates for home loans, it wasn’t just news; it was a flavour of things to come for the Indian realty sector. With property sales on the rise, projects being completed in a hurry, and availability of cheap sources of funding, the Indian real estate players have already begun performing well at the share market.
The BSE (Bombay Stock Exchange) realty index for the month of May saw a 30% jump from the previous month, leaving behind some of the key performers, such as capital goods, power, and banking. However, the sector is still plagued by some major crippling challenges, including unsold inventory and high debt levels, and so it may not be wise to invest in the shares of a realty company unless one is sure of its financial health.
Major Gainers at the Stock Market
Unitech, DLF, HDIL, IndiaBulls Real Estate, and Parsvnath Developers were the biggest gainers at the market. While Unitech’s share price increased by as much as 70%, from Rs 15.8 to Rs 27, DLF’s share price jumped 45%!
Some generally strong realty players like Godrej Properties, Oberoi Realty, and Mahindra Lifespaces had a more sobre run, with the share price rising in the range of 8% to 10%.
Experts say the instilling of a new government at the centre and economic revival are the key causes for this enthusiasm among realty players at the share market.
Future Direction for Real Estate Growth
This enthusiasm is set to remain and, in fact, turn into economic prosperity for the sector. Once the unsold inventory is sold, demand or sales of properties are increased, and cheaper sources of funding are made available, the sector will merrily take off.
Source: The Indian Express
Bombay Stock Exchange, BSE, DLF’s share price jumped 45%, Housing and Urban Development Minister M Venkaiah Nadu, Indian real estate players
