Despite govt push on housing in Interim Budget 2024 speech, major real estate stocks trade lower

Realty Stocks: In a huge push to empower poor in the country, Finance Minister Nirmala Sitharaman said in her Interim Budget 2024 speech on Thursday (February 2024) that the government would build 2 crore houses in the next five years for poor under the PM Awas Yojana (PMAY).

The government had a target to build three crore homes, which has now been increased to five crore.

She also said that a housing scheme would also be introduiced for middle-class Indians who live in rented houses, slums and chawls.

Under the new scheme scheme, they would be able to buy or build their own home, the finance minister said.

After the Sithraman's announcement of building crores of homes, let's see how real estate stocks are performing on BSE today.

HUDCO

Housing & Urban Development Corporation Ltd, which builds houses for government projects, hit an all-time high of 189.65 on BSE on Thursday.

It was trading up by 6.90 per cent, or Rs 11.90, at Rs 184.40, at 1:42 pm on Thursday.

Suraj Estate Developers Ltd

The stock of the company was trading lower by 1.52 per cent, or Rs 5.20, at Rs 336.95.

Oberoi Realty

A day after the real estate company announced its December quarter results, its stock slid by 2.01 per cent, or Rs 26.65, or Rs 1297.00 on Thursday.
 

DLF

The stock of one of the leading Indian real estate companies was also trading in negative territory as it was down by 0.57 per cent, or Rs 4.55, at Rs 797.80. 

Godrej Properties

Godrej Properties was also trading on a poor note as it slipped by 1.71 per cent, or Rs 40.55, at Rs 2337.10 on Thursday.

Here's what experts say about Sitharaman's announcement

Piyush Rambhia, Director, Palladian Partners Advisory LLP

In the new interim union budget, while major announcements were scarce, the real estate industry finds itself yearning for more, especially in the face of recent affordability concerns.

However, the promise of a housing scheme for the middle-income group and the ambitious plan to construct 20 million homes in rural areas provide a glimmer of hope, igniting optimism within the real estate and allied sectors, and further propelling the 'Housing for All' agenda.

Yet, amidst these hopes, it's important to recognise the prudence in emphasising infrastructure development and maintaining a fiscal deficit target of 5.1 per cent.

These measures, though not headline-grabbing, will serve as sturdy pillars supporting the industry in the year ahead.

Shalabh Saxena,Partner, Grant Thornton Bharat

The budget targets those in rented homes or slums, aiming to meet the demand for affordable housing.

This initiative gains significance as India aims for a USD 7 trillion economy by 2030 amid rapid urbanisation.

Housing receives a significant boost as the government incentivises the purchase and construction of houses, encouraging individuals to own their homes rather than opting for rented living.

This approach not only fosters a sense of increased security but also promotes a more stable and empowered homeownership experience.

Atul Monga, CEO and Co-founder, Basic Home loan

The prospect of constructing two crore new houses within the next five years is a commendable step towards addressing India's growing housing needs.

The focus on providing solar power benefits to one crore houses aligns with sustainable development goals, promoting clean energy and reducing environmental impact.

The Pradhan Mantri Awas Yojana's impact on 70 per cent women is a notable achievement, contributing to gender equality and empowering women through homeownership.

The budget's emphasis on rented homes and slums indicates a targeted approach to uplift the underprivileged, addressing the housing crisis in these vulnerable communities.

This initiative becomes pivotal as India strives to achieve a USD 7 trillion economy by 2030, necessitating robust urban infrastructure to accommodate the rising population.

In conclusion, the proposed measures reflect a holistic approach to housing, aligning with broader economic goals and sustainable development.