Realty stocks are likely to remain subdued for a long time, especially those with exposure to the residential segment due to the persisting weak conditions this year. At around 11.45 am on Tuesday, HDIL was down 6.76 percent and Unitech was trading 6.67 percent. Other real estate stocks such as Indiabulls, DLF, Oberal Realty and Sobha were also trading with losses.
The BSE Realty index was down 1.60 percent in comparison to BSE Sensex's 0.47 percent.
After witnessing a 17 percent fall in new launches during the first six months (H1) this year, the segment could see sluggish conditions to stay for some more time, despite hopes of improvement in sentiments.
"In H1 2017, the Indian residential market was riddled by the implementation of the Real Estate (Regulation and Development) Act in several states and the nationwide execution of the Goods and Services Tax (GST). We expect that RERA and GST compliance will remain a challenge for several developers for at least the next six months," real estate consultancy Colliers International India said in an update on Tuesday.
"We are expecting a decline in the number of launches in the second half of 2017," Colliers added.
The 17 percent-fall was in comparison to launches made during the July-December 2016 period and is based on data collected from major cities such as Mumbai, Delhi (NCR), Bengaluru, Pune and Chennai; the number of new launches stood at 40,600 units in H1.
The fall was sharper in IT city Bengaluru, at 23 percent when compared to the corresponding period last year (January-June 2016). The new launches at 13,400 units were next to Mumbai's 14,000 units and were mostly confined to Yelahanka, Devanahalli, Ranchenahalli and Kogilu "catering to the higher demand from IT employees of the city," the consultancy said.
New launches in H1 were relatively lower in other cities such as Chennai (5,300 units), Pune (4,034 units) and NCR (3,900 units).
However, waiting for prices to fall further may not be wise for potential home buyers, the consultancy said. "Prices have been stabilised in most markets, and any further reduction
is unlikely. Thus, we advise buyers to expedite their buying decisions and take advantage of lower
interest rate regime," Colliers International India said.