Impact of Budget 2025 on Real Estate Stocks

The Union Budget 2025 has sparked hope in the real estate sector, leading to a notable rise in the Nifty Realty index, which increased by nearly 3% on February 1, 2025.

This surge comes despite a generally weak performance otherwise and was a reflection of the budget’s favourable reforms.

A key highlight of the budget was Finance Minister Nirmala Sitharaman’s announcement to raise the tax deducted at source (TDS) limit on rental income from ₹2.4 lakh to ₹6 lakh per year. This change is expected to ease the tax burden for landlords and simplify rental transactions, making the market more efficient.

Following this announcement, several real estate stocks saw significant gains. Prestige Estates rose nearly 10%, reaching an intraday high of ₹1,490.80, while Phoenix Mills increased by 5.5%. Other major players like Macrotech Developers and Sobha also reported gains of around 4-5%. Other prominent brands, including DLF, Godrej Properties, Raymond, and Oberoi Realty, also saw surges of over 2% each.

There were other provisions in addition to TDS adjustments. The budget now allows homeowners to claim tax exemptions on two self-occupied properties. This move should encourage investments in second homes, particularly in smaller cities, and alleviate tax pressures on middle-class homeowners.

The budget also allocated funds for urban development, including a ₹1 lakh crore Urban Challenge Fund aimed at enhancing infrastructure and reviving stalled housing projects. Additionally, ₹15,000 crore was set aside for the SWAMIH Fund to help complete over 1 lakh pending residential units, providing much-needed relief to homebuyers.

Of course, there was some disappointment over the lack of direct incentives for affordable housing, but the overall sentiment is positive. The budget’s focus on economic growth, infrastructure development, and middle-class welfare is expected to stimulate demand across the real estate market.

In summary, the Union Budget 2025 has laid a strong foundation for growth in India’s real estate sector, promoting homeownership and improving market efficiency.

At Save Max, we look forward to a rejuvenated real estate market in the coming months. Contact us if you wish to explore property investment opportunities in Gurugram and other Indian cities.

Sources: Livemint/Business Today/Economic Times