Real estate in the last quarter was plagued by funding woes faced by the non-banking financial companies (NBFCs) sector but there is some relief coming in for homebuyers after the goods and services tax (GST) council slashed rates. Will the reality for real estate change this quarter?
JC Sharma, VC and MD of Sobha, Adhidev Chattopadhyay, Real Estate Analyst at ICICI Securities and Ashok Tyagi, Whole Time Director of DLF spoke at length about the GST rate cut and other latest developments in the sector.
Tyagi said GST rate tweaks for real estate will boost consumer demand. He further said with this, the finance minister has indicated that the government will come up with more rules with regards to the input tax credit.
Sharma said developers selling affordable housing and luxury housing will benefit.
Talking on the business front, he said, “We have been clear that we should be growing on a double-digit basis and we believe we are well on course in achieving that kind of growth this financial year and in the next financial year.”
Chattopadhyay of ICICI Securities said real estate sector still plagued with NBFC funding crisis.
“In our coverage universe the stocks that we are betting on are DLF, Prestige Estates Projects, Phoenix Mills and Brigade Enterprises," Chattopadhyay added.
“Our thesis broadly remains the same that developers who have a good stream of annuity assets plus strong residential business are the ideal plays in the real estate sector or in case of Oberoi Realty which is largely a residential play but with very low debt on balance sheet. So this is how we would look to play the sector,” he further mentioned.