Shares of real estate developers rallied in trade on Wednesday after Karnataka Government reduced stamp duty on flats. The Karnataka Legislative Assembly passed an amendment to Stamp Act wherein it reduced stamp duty to 3 per cent from 5 per cent on properties below Rs 45 lakh. Measure of real estate shares on the National Stock Exchange - Nifty Realty index jumped as much as 8 per cent with all the 10 real estate shares trading with a positive bias.
DLF was the top gainer among the real estate shares. The country's largest real estate developer rallied 10 per cent to hit an intraday high of Rs 373.75. Godrej Properties advanced 10 per cent, Sobha gained 6.5 per cent, Indiabulls Real Estate rose 6.74 per cent, Hemisphere Properties added 6.4 per cent, Prestige jumped 5 per cent, Oberoi Realty advanced 6 per cent, Brigade Enterprises climbed 3.4 per cent, Sunteck Realty gained 4.5 per cent and Phoenix Mills jumped 3.2 per cent.
Karnataka's cut in stamp duty came after Maharashtra reduced stamp duty on real estate transactions to 3 per cent in August last year due to Covid-19 pandemic. According to reports there are more than 1 lakh unsold flats in Bengaluru and other cities.
"The Karnataka government has taken measures to encourage buyers to invest in real estate, by providing a 2 per cent duty reduction concession on stamp duty. The stamp duty reduction will not only help both the lower middle class section of the society but will also have a positive impact on the real estate sector which is struggling during times of pandemic. There are more than 1 lakh flats in Bangalore and suburbs that are unsold. Slashing of the stamp duty on flats will enable the low-income groups to buy houses as independent sites and will boost the real estate sector," Husain Johar, Founder, MakeMyHouse.com said.
The Nifty Realty index has so far this year outperformed the benchmark Nifty 50 index. The Nifty Realty index has surged 45 per cent year-to-date while the Nifty 50 index climbed 26 per cent.
As of 1:13 pm, Nifty Realty index was up 7.5 per cent massively outperforming the Nifty which wwas trading on a flat note.