Budget 2025: Realty Stocks Surge as Government Announces Tax Relief Measures

Real estate stocks witnessed a significant rise following the Budget 2025 announcement by Finance Minister Nirmala Sitharaman. Companies such as DLF, Sobha Ltd, Oberoi Realty, Prestige Estates, Phoenix Mills, and Macrotech Developers saw their share prices increase by up to 9%. The boost in investor sentiment came after the announcement that taxpayers can now claim the annual value of two self-occupied properties as "nil" without any conditions. Additionally, the increase in the income tax exemption threshold to Rs 12 lakh under the new tax regime is expected to enhance disposable income, potentially leading to higher investments in real estate.

Stock Performance Post-Budget Announcement

Prestige Estates recorded a 9.31% increase in share value, reaching Rs 1,489.95 on the BSE, compared to its previous close of Rs 1,363. This rise pushed the company’s market capitalization to Rs 61,917 crore.

DLF, a prominent NCR-based real estate firm, saw its shares climb by 3% to Rs 767.60, raising its market capitalization to Rs 1.87 lakh crore. Similarly, Oberoi Realty’s stock rose by 2.33% to Rs 1,854.85, bringing its market capitalization to Rs 67,017 crore.

Phoenix Mills experienced an 8% rise in share value, trading at Rs 1,774, with its market capitalization increasing to Rs 62,550 crore. Sobha Ltd, a South India-based developer, saw a 4.61% increase, reaching Rs 1,385, pushing its market capitalization to Rs 14,687 crore. Macrotech Developers also gained nearly 5%, reaching Rs 1,268, taking its market capitalization to Rs 1.26 lakh crore.

Impact of Budget Announcements on Real Estate

The announcement allowing taxpayers to claim the annual value of two self-occupied properties as nil without conditions was a key factor in the stock surge. Previously, this benefit was available only under specific conditions. The change is expected to reduce the financial burden on homeowners and increase investment in multiple properties.

Another significant measure was the increase in the income tax exemption limit under the new tax regime to Rs 12 lakh. This move is expected to enhance the purchasing power of salaried individuals, potentially leading to greater investment in the housing sector.

Industry Reactions

Vikas Rathod, Managing Director and CEO of Ensemble Infra, stated that the rationalization of customs duties on construction materials could bring real cost efficiencies to the sector. He highlighted the potential for these measures to accelerate commercial development.

Avneesh Sood, Director of Eros Group, pointed out that first-time homebuyers stand to benefit from enhanced tax incentives and relaxed TDS thresholds on rent. He emphasized that these measures could ease the financial burden on homebuyers. The allocation for affordable housing, including the completion of 40,000 units under the SWAMIH Fund, is also expected to provide more opportunities for aspiring homeowners. Sood further noted that the rationalization of property tax provisions simplifies compliance for buyers.

The positive stock market response suggests strong investor confidence in the real estate sector. With increased tax benefits and enhanced affordability, demand for residential properties may rise. The government’s focus on streamlining regulations and supporting homebuyers is expected to sustain this momentum.

While challenges such as high borrowing costs and regulatory hurdles remain, the recent policy changes indicate a favorable outlook for real estate growth. Investors and developers alike will be watching for further policy implementation and its impact on market trends.