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Real Estate stocks zoom after Maharashtra govt cuts stamp duty on flats

Real Estate stocks zoom after Maharashtra govt cuts stamp duty on flats

Real Estate stocks zoom after Maharashtra govt cuts stamp duty on flats
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By Ankit Gohel  Aug 27, 2020 11:47:20 AM IST (Updated)

Shares of real estate companies rallied 4-7 percent in the early trade on Thursday after the Maharashtra government decided to temporarily reduce stamp duty on flats.

Shares of real estate companies rallied 4-7 percent in the early trade on Thursday after the Maharashtra government decided to temporarily reduce stamp duty on flats.

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The share price of Sunteck Realty jumped over 7 percent while Oberoi Realty and Kolte-Patil Developers gained over 5 percent each. Godrej Properties rallied more than 4 percent on the NSE.
The Nifty Realty index was trading over 3 percent higher.
The Maharashtra government on Wednesday announced its decision to reduce stamp duty on flats from 5 percent to 2 percent till December 31 and to 3 percent between January 1 and March 31.
The move is expected to boost sales in the sagging real estate market amid the outbreak of coronavirus.
Currently, Maharashtra charges stamp duty of 5 percent in cities like Mumbai, Pune, Nagpur and Nashik. In other cities, the rate is 6 percent.
Analysts believe the affordable and mid-segment properties, which are in maximum demand, will see the most traction from such this move.
"Apart from the obvious homebuyer benefits, the government can generate badly-needed revenue via increased registrations after the most severe downturn in recent history," said Anuj Puri, Chairman – ANAROCK Property Consultants.
This stamp duty rate cut can push sales further into the green during the festive season, he added.
Another consultant Knight Frank India CMD Shishir Baijal said the move is likely to provide temporary relief to end-users looking for relaxation to complete their impending purchases. JLL CEO & Country Head (India) Ramesh Nair said the move will augur well for prospective homebuyers as it is expected to result in direct financial savings for them.
"Though temporary in nature, this is a strong inoculation into the dampened market sentiment and will help in reviving sales. While economic growth is expected to be under pressure in the short term, we definitely see positive synergies for home buyers," Nair added.
Realty player Sunteck Realty Chairman and MD Kamal Khetan said the announcement will accelerate the residential real estate demand and further improve the sales momentum.
Dr Niranjan Hiranandani, National President, Naredco lauded the announcement saying, "This will certainly stimulate the housing demand and help in converting inquiries into the sales closures."
He further emphasized that if the central government can slash GST rates in an upcoming council meeting, it would act as a shot in the arm.
"As the fortune of the real estate sector is linked to nearly 220 allied sectors, a boost in demand for housing will help other sectors and boost the overall economy. State government's latest move complements the central government's push for housing by announcing a 1-year extension for Credit Linked Subsidy Scheme (CLSS) under Pradhan Mantri Awas Yojana (PMAY) and RBI's efforts to cut repo rates to 4 percent which is a two-decade low," said Manju Yagnik, Vice-Chairperson of Nahar Group and Vice President of NAREDCO.
 
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