Sunteck Realty share price soars 20%; realty stocks jump as Maharashtra government slashes stamp duty

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August 27, 2020 11:09 AM

The Nifty Realty index has rallied 36 per cent from March 24 lows, as compared to a 55 per cent surge in Nifty 50 index from the level of 7,511.

real estate, realty sector, stamp duty, sunteck realtyThe relaxation will continue with the 2 per cent cut from January 1 to March 31 next year

Realty stocks zoomed up to 20 per cent in Thursday’s trade after the Maharashtra government decided to slash the stamp duty on sale deed documents from 5 per cent to 2 per cent between September 1 and December 31 this year. Realty stocks such as Sunteck Realty share price soared 19.49 per cent to Rs 307.70, Prestige Estates Projects jumped 10 per cent to hits day’s high of Rs 264.55 apiece while Godrej Properties gained 8.79 per cent to trade at Rs 924.45 apiece. The relaxation will continue with the 2 per cent cut from January 1 to March 31 next year, an official statement said. Analysts believe that this decision will boost the ailing sector. 

The Nifty Realty index has rallied 36 per cent from March 24 lows, as compared to a 55 per cent surge in Nifty 50 index from the level of 7,511. Stamp duty is one of the largest contributors to state revenues. It is the transactional tax which is collected by the government on property purchases. “The phased reduction in the stamp duty rates from the present 5% in Mumbai and Pune to 2% (until December 2020) and 3% (January – March 2021) is a much-awaited measure from the Government of Maharashtra as the residential real estate markets in these top two cities are reeling under pressure. The rest of Maharashtra will also benefit from the reduction in stamp duty,” said Ramesh Nair, CEO & Country Head (India), JLL.

Nair added that the residential market is unlikely to offer this palette anytime soon – rationalised pricing, lowest home loan interest rates, the extension of credit linked subsidy scheme and developers doling out lucrative schemes and now this is topped with lower stamp duty rates. Among other gainers on Nifty Realty were DLF, Brigade Enterprises, Sobha, Indiabulls Real Estate, The Phoenix Mills and Omaxe, up in the range of 0.50-6 per cent.

“The state government’s decision on stamp duty reduction is a welcome move and a festive gift for homebuyers. It will surely improve the sentiments and instil confidence in homebuyers. With home loan rates at a decade low, it will benefit the consumers to buy their dream home. The real estate industry is happy and thankful that the state government is taking proactive steps to review the economy and the sector,” said Bhushan Nemlekar – Director, Sumit Woods Limited.

Meanwhile, S&P BSE Sensex was trading 140 points or 0.36 per cent higher at 39,213 and the broader Nifty 50 index was ruling at 11,586, up 36 points or 0.32 per cent.

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