RERA and realty stocks: Should you invest?

Shares of real estate companies were in focus on Tuesday with the Nifty Realty Index gaining nearly 3% on the National Stock Exchange (NSE) in intra-day deals. By comparison, the Nifty 50 moved up 0.3% to 9,352 levels. Thus far in calendar year 2017 (CY17), the Nifty Realty index has rallied 56%, as compared with 14% rise in the Nifty 50 index.  The outperformance in CY17 comes amid multiple developments on the policy initiatives front - from the implementation of Real Estate (Regulation and Development) Act, 2016 (RERA) that came into force with effect from May 1, 2017 - to amendments in Real Estate Investment Trust (REIT) regulations and Infrastructure Investment Trusts (InvITs), which are seen as a long-term positive by analysts. Commodity Trading Tips

Among individual stocks, Sobha, Indiabulls Real Estate, Godrej Properties, Prestige Estates, DLF and Housing Development and Infrastructure (HDIL) from the Nifty Realty index gained between 2% and 8% on the NSE on Tuesday. Ansal Buildwell, Hubtown, D B Realty, Ajmera Realty and Kolte-Patil Developers - the non-index real estate stocks - were also trading higher in the range of 3% to 9% on the BSE. Given the rally, analysts now remain cautious on this space and suggest investors who are looking to make a quick buck should exit. However, select counters do remain a good story from a long-term horizon, they suggest.  Nifty Trading Tips