Realty stocks advanced on Thursday after the Reserve Bank of India's surprise decision to keep the policy rates unchanged at 6.5%.
"This will help keep inflation in check and improve market sentiments, which is the need of the hour," said Pritam Chivukula, co-founder and director, Tridhaatu Realty & Infra Pvt. "This is a big booster for the real estate sector, which was overlooked in the recently concluded budget."
The residential real estate sector has reeled under pressure because of high inflation increasing input costs and rising mortgage rates, according to India Ratings and Research. The rate hikes challenged demand dynamics in the sector.
After the bi-monthly Monetary Policy Committee meeting, RBI Governor Shaktikanta Das on Thursday said the panel decided to keep the benchmark repo rate unchanged but the MPS is ready to act should the situation warrant it. While inflation remains stocks, the RBI chose to pause among global demand uncertainty.
"We can look forward to seeing resurgence for real estate demand," Chivukula said. "We hope that the state government will step-in again, to lighten the homebuyer's load by reducing stamp duty to further boost the sentiments."
"For first-time homebuyers, acquiring a home is considered as the biggest asset and this move will have a positive impact on a buyer's decision," said Himanshu Jain, vice president of sales, marketing and CRM, Satellite Developers Pvt.
The NSE Realty ended the day higher by 2.84%, compared with a 0.24% advance in the NSE Nifty 50. The index was the top sectoral gainer on Thursday and on a weekly basis.
Nine out of the 10 constituents of the index were up. Godrej Properties Ltd., DLF Ltd., Oberoi Realty Ltd., and Mahindra Lifespace Developers Ltd. ended over 2% higher.
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