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Business News/ Market / Stock-market-news/  Realty shares surge on hopes of better demand
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Realty shares surge on hopes of better demand

With lenders cutting rates on the back of credit sops announced by the government for the housing sector, the market has become optimistic

BSE Realty Index jumped 6.5% in the last five consecutive sessions. Photo: Ramesh Pathania/MintPremium
BSE Realty Index jumped 6.5% in the last five consecutive sessions. Photo: Ramesh Pathania/Mint

Mumbai: Shares of realty firms jumped on Monday, with BSE Realty Index gaining for the fifth consecutive session on the expectation of improvement in demand in the sector as lenders started cutting rates on the back of credit sops announced by the government for the housing sector.

Oberoi Realty rose 5%, Unitech Ltd rose 5%, DLF Ltd rose 4.7%, Indiabulls Real Estate Ltd 4.3%, The Phoenix Mills Ltd rose 3.6%, Housing Development Infrastructure Ltd rose 3.3%, Godrej Properties Ltd 2.1% and Sobha Ltd 1.4%.

BSE Realty Index jumped 6.5% in the last five consecutive sessions.

Prime Minister Narendra Modi on Saturday announced two housing schemes for the urban poor and lower middle class. From 2017, for housing loans up to Rs9 lakh, the government will provide 4% interest subsidy, while for housing loans of up to Rs12 lakh, a 3% interest subsidy will be given. Under the Pradhan Mantri Awas Yojana, 33% more houses will be constructed.

“We welcome the move announced by the prime minister in housing sector in urban and rural areas. Prime Minister Awas Yojna (PMAY) Urban and Rural will get well deserved booster through this as more number of EWS/LIG (economically weaker section/lower income group) families would now come under the ambit of PMAY schemes," said Anil Sachidanand, managing director and chief executive officer, Aspire Home Finance Corp. Ltd.

“This announcement is particularly important as housing sector in rural areas is also given that much required additional support. This will increase the formal credit flow to rural areas which is expected to be utilized not only for constructing new houses but also for converting the existing kutcha houses to pucca ones and for housing related additional construction to the existing structure (improvement and extension). This demand side cushion in the form of formal credit from financial institutions will go a long way in reducing the rampant dependency on informal sources that charge exorbitant interest rates," Sachidanand added.

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Published: 02 Jan 2017, 02:04 PM IST
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