Top real estate companies have seen a good growth in sales during the last one year due to low interest rates, government steps like reduction in stamp duty in some states and implementation of RERA rules. Despite all odds, the real estate sector has remained solid. In the last one month, the Nifty Reality Index has seen a rise of about 22 percent. Whereas in 2021 so far the reality index has run about 45 percent. It has been one of the best performing indices of NSE.
The most interesting thing is that the index has even crossed its decade high. Dhan (Dhan) founder Jai Prakash Gupta says that the Nifty Reality Index has touched its 11-year high of 456.15. The sales of top real estate companies have seen a strong growth during the last one year. The reason for this has been low interest rates, government steps like reduction in stamp duty in some states and implementation of RERA rules. Let us tell you that due to the implementation of RERA in big states like Maharashtra, there has been a lot of transparency in the real estate sector.
These 5 reasons led to a bumper jump of 950 points in Sensex, Nifty crossed 17,800
Jai Prakash Gupta further said that if this sector is analyzed looking at the current conditions, then it is expected to perform well in the next two quarters. The Karnataka government has reduced the rate of stamp duty on property registration from 5 per cent to 3 per cent. Which is very good news for this sector.
With this the festive season has started. In such a situation, many offers are likely to come from the government and banks. Banks can gift customers low interest rates on home loans. Due to which companies like Oberoi Realty, Godrej Property and Prestige Estate can become a strong boom.
The financials of these companies are very strong and they are well known companies in their sector. But it is also to be kept in mind that the risks associated with the third wave of Corona, possibilities like cuts in the bond purchase program by the US Fed can prove to be unfavorable for this sector.
If the US cuts its bond buying program any time soon, we could see the beginning of a period of interest rate hikes. Apart from this, the contagious effect of China’s Evergrande crisis can also derail this rally.
It is worth mentioning that in the last one decade, 6 stocks in the realty sector have proved to be multi-baggers. Stocks such as Godrej Properties, Brigade Enterprises and Phoenix Mill have seen gains of more than 4 times during this period. India Bulls Real Estate has been the only stock which has given negative returns during this period.
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