Realty Stocks Rally After Most Expensive Indian Market Cuts Tax
Shares of Indian developers surged on Thursday after Maharashtra state slashed taxes on home purchases.
(Bloomberg) -- Indian developers surged on Thursday after Maharashtra state, which houses the country’s most expensive property market Mumbai, slashed taxes on home purchases.
Stamp duty on real estate transactions was cut to 2% from 5% through 2020, the administration said in a statement late on Wednesday.
“The reduced cost of the stamp duty is bound to encourage first time homebuyers, fence sitters as well as resale flat buyers to invest in real estate,” said Nayan Shah, president of the Maharashtra unit of the Confederation of Real Estate Developers Association of India. “Coupled with the festive season, we expect demand to pick up significantly which will provide a huge respite not only to home buyers but also to developers who have been suffering amid low demand and limited cash flow availability due to Covid-19.”
Sales of homes and leasing of offices across eight of India’s biggest cities saw their steepest fall in a decade in the first half of 2020, according to Knight Frank, as lockdowns to contain the coronavirus pandemic worsened already slowing economic growth and consumer demand.
Shares of Sunteck Realty Ltd. gained as much as 19.5% as of 10:10 a.m. in Mumbai on Thursday, Oberoi Realty Ltd. 8.4%, Godrej Properties Ltd. 7.4%, Indiabulls Real Estate Ltd. 6.4%. The BSE Realty Index is the biggest gainer among BSE’s 19 industry indexes, and at its highest level in more than five months.
©2020 Bloomberg L.P.