Realty stocks in red zone despite sector's revival
Bangalore: Even though real estate sector is showing some revival, realty stocks have lost about 10.5 percent since the start of this month, and also emerged as the top loser last week with a loss of 5.7 percent. The sector traded in the range of 3390.16 3189.77 points. As on February 23, 2010, the market capitalization of realty stocks is of 
104,355.53 crore.
Among the losers Realty sector was followed by Oil and Gas sector, which lost 1.6 percent, and in gainers' list Health Care and Bankex were the top gainers for the week, up by 1.9 percent and 1.6 percent, respectively.
Experts believe that while a revival in the real estate rates is being observed in most major cities, structural issues, which are not so apparent at first look, are creeping in and affecting stock performance. In some of the cities, the demand is yet to pick up. A report on real estate by local broking house Ambit Capital pointed out that in Bangalore, residential sale prices have increased by approximately 10-20 percent from the mid-2009 trough, but the current sales volumes are extremely weak, about 90 percent below the peak sales level.
Foreign broking major JP Morgan believes that policy risks for the sector are on the rise and investors could expect banks to tighten their developer financing. "But a big (1-percentage point) rise in mortgage rates is not expected," a recent report by JP Morgan noted.
104,355.53 crore.
Among the losers Realty sector was followed by Oil and Gas sector, which lost 1.6 percent, and in gainers' list Health Care and Bankex were the top gainers for the week, up by 1.9 percent and 1.6 percent, respectively.
Experts believe that while a revival in the real estate rates is being observed in most major cities, structural issues, which are not so apparent at first look, are creeping in and affecting stock performance. In some of the cities, the demand is yet to pick up. A report on real estate by local broking house Ambit Capital pointed out that in Bangalore, residential sale prices have increased by approximately 10-20 percent from the mid-2009 trough, but the current sales volumes are extremely weak, about 90 percent below the peak sales level.
Foreign broking major JP Morgan believes that policy risks for the sector are on the rise and investors could expect banks to tighten their developer financing. "But a big (1-percentage point) rise in mortgage rates is not expected," a recent report by JP Morgan noted.