Shares of real estate companies outperformed on Saturday after Finance Minister Nirmala Sitharaman announced cuts in personal income tax rates in Union Budget 2025-26. She said there would be no tax for income up to Rs 12 lakh under the new tax regime, besides she announced the setting up of an Urban Challenge Fund of Rs 1 lakh crore for rejuvenation of Indian cities.
The BSE Realty index surged more than 3% on February 1, while the benchmark BSE Sensex settled 0.11% up at 77,585. With a gain of 6.59%, Anant Raj emerged as the top gainer in the index. It was followed by Phoenix Mills (up 5.96%), Prestige Estates (up 5.58%), Lodha (up 5.06%) and Sobha (up 3.55%). Signatureglobal, DLF, Oberoi Realty and Godrej Properties also gained somewhere between 0.96% and 3%.
Samir Jasuja, Founder and CEO of PropEquity said, “The Budget’s focus on improving infrastructure through PPP projects and interest-free loan to states for capital expenditure, setting up an Urban Challenge Fund of Rs 1 lakh crore for rejuvenation of Indian cities will improve the real estate activity in metro and tier 2 cities by encouraging developers to invest and partake in the development.”
Jasuja further added that the announcement of zero tax for income up to Rs 12 lakh under the new tax regime will give a big boost to consumption including spurring demand for homes,” he said.
Jasuja added that SWAMIH 2.0 with an allocation of Rs 15,000 crore is a small yet welcome move considering that the government is targeting to complete 1 lakh units. The government must come up with a simplified mechanism to allow bigger developers to take over these stalled units so as to expedite the completion of over 5 lakh units currently stalled."
According to PropEquity, close to 2,000 housing projects across 42 cities comprising 5.08 lakh units have been stalled. 1,636 projects totalling 4,31,946 units in 14 tier I cities and 345 projects totalling 76,256 units in 28 tier II cities have been stalled.
Peush Jain, MD-Commercial Leasing and Advisory, Anarock Group said, “The government in Budget 2025-26 announced the formulation of a national framework in areas like talent availability, infrastructure, building byelaws etc. as guidance to states for promoting Global Capability Centres in emerging tier 2 cities.
“GCCs have been driving demand for office spaces and this move, alongside the government’s emphasis on improving liveability in Indian cities and infrastructure development will go a long way in establishing India as a hub for Global Capacity Centre. This move will boost employment opportunities, creation of new office supplies and draw national level developers to these cities. The office sector growth is expected to stay buoyant with record leasing activity led by GCCs,” Jain said.
According to Anarock, developers are currently developing around 25-30 million square feet of office space across major cities for catering to the requirements of domestic and foreign companies.