Realty Shares Are Finally Making Real Gains; Here's Why?

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Realty Shares are zooming and in the last few months have once again become an investor and a speculator's delight.

Realty Shares Are Finally Making Real Gains; Here's Why?
Brigade Enterprises: Quotes, News
BSE 177.90BSE Quote6 (3.37%)
NSE 173.55NSE Quote1.55 (0.89%)
Prestige Estates Projects: Quotes, News
BSE 192.80BSE Quote3.3 (1.71%)
NSE 192.20NSE Quote2.55 (1.33%)
Industry favourite, HDIL has zoomed from levels of Rs 58 in Dec 2014 to Rs 138 on April 13. In fact, the stock hit a 52-week high of Rs 143 on April 13.

Oberoi Realty, Godrej Properties, Prestige Real Estates and Brigade Enterprises are other stocks that have rallied in trade.

But, the real story is that there is more potential for upside in these stocks. Here are some of the reasons for the same.

Home loan interest rates are beginning to fall

Interest rates on home loans have fallen. First, HDFC cut interest rates on loans and this was quickly followed by the country's largest lender State Bank of India.

With EMIs set to fall, there could be further growth prospects for the industry.

Real Estate Bill gets nod

The Real Estate Bill recently got the nod of the Union Cabinet. The Bill when it becomes a law will protect the interest of consumers and promote fair play in the industry.

The good thing about the Bill is that it could see an increased demand from buyers and investors alike who have thus far been skeptical of real estate investment.

It could also bring in larger players like private equity investors, whose investments could be protected by the law. All this could be good news for the Real Estate industry.

Interest rates may drop further

Interest rates may drop further in the coming days and analysts expect another 50 basis points cut in interest rates by the end of the year.

This benefits the debt laden real estate companies by way of reduced interest burden and also home loan borrowers, which could ultimately push demand higher.

GoodReturns.in

Read more about: hdil, realty
Story first published: Tuesday, April 14, 2015, 10:18 [IST]
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