Real estate stocks faced a significant decline on Thursday afternoon following the release of the interim Budget 2024, which failed to include any major announcements. Prestige Estates Ltd saw a drop of 2.75%, while Sobha Ltd, Oberoi Realty, Godrej Properties, and The Phoenix Mills Ltd were among the top losers for the BSE Real Estate index, which fell by 1.35% to 6,675.21.
Despite the absence of big-bang announcements, the interim budget maintained its focus on infrastructure upgrades and building connectivity throughout the country. Anuj Puri, Chairman of ANAROCK Group, stated that while the budget did not meet the real estate sector’s key demands, the upcoming Union Budget might introduce more concrete measures to address industry concerns and potentially impact market trends.
The interim budget did provide some positive developments for the housing sector. The government continued the implementation of PM Awas Yojana (Gramin), successfully meeting the target of nearly 3 crore houses. The plan now aims to take up an additional 2 crore houses in the next five years. Another promising initiative suggested by Finance Minister Nirmala Sitharaman is the launch of a scheme to assist the middle class in purchasing or building their own houses. This move is expected to free up encroachment areas like slums, making redevelopment easier.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, expressed his support for the government’s intention to complete 2 crore housing units in the next five years, as it aligns with the ‘Housing for All’ mission. Furthermore, the proposed boost for the middle-class housing sector is regarded as a positive inclusion.
The interim budget also witnessed an increase in capex outlay allocation by 11.1% to Rs 11,11,111 lakh crore, accounting for 3.4% of GDP. This allocation is expected to unlock the potential for real estate development across different assets, especially as a significant portion will be utilized for infrastructure upgrades and new projects.
In conclusion, while the interim budget did not meet all the expectations of the real estate sector, it lays the groundwork for potential future measures. The upcoming Union Budget is anticipated to address the industry’s concerns more explicitly and have a greater impact on market trends.
1. Why did real estate stocks decline after the release of the interim Budget 2024?
Real estate stocks faced a decline because the budget did not include any major announcements that would directly benefit the real estate sector.
2. Which real estate companies saw a drop in their stocks?
Prestige Estates Ltd, Sobha Ltd, Oberoi Realty, Godrej Properties, and The Phoenix Mills Ltd were among the top losers in the BSE Real Estate index.
3. What were the positive developments for the housing sector in the interim budget?
The government continued the implementation of PM Awas Yojana (Gramin) and set a target of nearly 3 crore houses. Additionally, a scheme was proposed to assist the middle class in purchasing or building their own houses.
4. How is the increase in capex outlay allocation expected to impact real estate development?
The allocation of funds for infrastructure upgrades and new projects is expected to unlock the potential for real estate development across various assets.
5. Is the interim budget considered satisfactory for the real estate sector?
While the interim budget did not meet all the expectations of the real estate sector, it lays the groundwork for potential future measures. The upcoming Union Budget is expected to address industry concerns more explicitly.
– Interim Budget: A budget presented by the government for a short period, usually covering a few months, until the formal budget is presented.
– Real estate sector: The business of buying, selling, or renting properties, including land and buildings.
– BSE Real Estate index: An index that tracks the performance of real estate stocks listed on the Bombay Stock Exchange (BSE).
– PM Awas Yojana (Gramin): A government scheme aimed at providing affordable housing to rural households in India.
– Capex outlay allocation: The allocation of funds for capital expenditure (spending on assets like infrastructure, buildings, etc.).