Nifty Realty at multi-year high, gains 110 per cent in 2017

For the so far neglected sector, realty, 2017 as a highly momentous year in terms of the index movement since 2012. Realty sector witnessed one of its biggest reform year , which kicked off with demonetisation and was followed by RERA and GST.

Nifty Realty index survived and surged as much as 110 per cent in 2017 after consolidating for five consecutive years. A kind of hammer pattern in December 2016 candle gave a reversal to the index and thereby the index surged consistently with just 3 breathers in between.

RERA, that is the mandatory registration of new and under construction projects, provided real estate buyers more transparency, security and confidence while purchasing property, disappointed the developers and builders to a large extent. Real estate developers had almost halted the sales transactions amid demonetisation and RERA. However, the excitement amongst the buyers post the implementation of RERA, followed by an increased demand buoyed the sector.

Moreover, the imposition of 12 per cent GST on under construction property and 18 per cent on purchase of real estate healed sellers’ sentiments in the sector.

Barring HDIL and Unitech that hardly form 8 per cent of the sector, all other stocks helped the index grow continuously in 2017. The index is trailing at a multi-year high where it broke its previous high of 344 level, made in April 2011. Thereby, we can say it’s a rounding bottom breakout for the index if it sustains 344 on December 2017 closing basis. We can expect some more action in 2018.