A labourer stacks concrete blocks on his head at the construction site of a residential complex. (Reuters)
New Delhi: Realty stocks surged up to 20 per cent on Wednesday after the government announced infrastructure status to affordable housing to encourage investment in the segment and offered tax sops for developers sitting on completed unsold inventories.
Shares of DLF zoomed 7.81 per cent, Godrej Properties surged 5.43 per cent, HDIL jumped 5.2 per cent, Oberoi Realty (4.48 per cent) and Prestige Estates Projects (4 per cent) on BSE.
The BSE realty index was trading higher by 3.58 per cent during the late afternoon trade.
From the non-index stocks, Ashiana Housing skyrocketed 19.99 per cent, Ansal Housing & Construction zoomed 9.83 per cent and Ganesh Housing Corporation jumped 9 per cent.
Shares of housing finance companies also rose with HDFC rising by 3.6 per cent and LIC Housing Finance (2.78 per cent).
The National Housing Bank will refinance individual housing loans of about Rs 20,000 crore in 2017-18.
To promote affordable homes, the government also proposed to amend the Section 80-IBA, relaxing the condition of period of completion of the project for claiming deduction from the current three years to 5 years.
“We propose to facilitate higher investment in affordable housing. Affordable housing will now be given infrastructure status, which will enable these projects to avail the associated benefits,” Finance Minister Arun Jaitley said.
With surplus liquidity created by demonetisation, he said the banks have already started reducing their lending rates, including those for housing.