As the Union Budget 2024-25 presentation approaches on July 23, the real estate sector is abuzz with anticipation. Industry stakeholders are hopeful that the Modi 3.0 regime will introduce significant tax incentives and measures to spur long-term growth and address the pressing needs of the market.
With a strong performance in the first half of 2024, marked by record-high sales of approximately 493,000 units and the launch of 447,000 new units, the sector's growth has predominantly been in the mid-range and luxury segments. However, to sustain this positive trend and cater to the lower-income groups, experts emphasize the need for renewed focus on affordable housing.
Anuj Puri, Chairman of ANAROCK Group, underscores the importance of government action: "Numerous incentives for affordable housing have lapsed over the past two years. Rejuvenating this sector through tax incentives for developers and tax breaks for buyers is crucial."
The industry is also advocating for broader infrastructure development to enhance urban living standards and foster new growth areas. Key questions linger about whether the government will grant industry status to the entire housing sector and implement measures to revitalize affordable housing, which has struggled since the pandemic.
Arvind Nandan, Managing Director of Research & Consulting at Savills India, highlights potential budgetary benefits: "Changes to income tax exemption limits could benefit low-income earners and stimulate economic activity. Support for affordable housing through reinstated PMAY incentives and GST reforms will be essential for accessibility and sustainable development."
The upcoming budget is seen as an opportunity to reshape the trajectory of India's real estate sector. Mohit Goel, Managing Director of Omaxe, calls for increased tax benefits: "Raising the deduction limit for interest on home loans and reducing GST on under-construction properties can significantly enhance housing demand and stimulate the market."
Ease of doing business is another critical area. Addressing liquidity issues, simplifying regulations, and providing increased funding for affordable and mid-income housing are essential for sustainable growth. "Streamlining approval processes and digitizing land records can reduce project delays, benefiting both developers and end-users," adds Goel.
The real estate sector, which contributes 6-7% to India's GDP and is projected to reach $1 trillion by 2030, awaits decisive budgetary support. With a shortage of 29 million units, primarily in affordable housing, significant measures to stimulate supply and demand are crucial.
LC Mittal, Director of Motia Group, suggests granting industry status to the entire real estate sector to reduce borrowing costs and lower home prices. "The budget should establish a foundation for sustainable and affordable urban housing growth, especially with India's urban population projected to reach 600 million by 2030."
Gunjan Goel, Director at Goel Ganga Developments, highlights the need for solutions to liquidity challenges and support for stalled projects. "Extending the CLSS scheme and raising the price limit for metro cities can boost demand and affordability," she says.
Aman Gupta, Director of RPS Group, emphasizes the importance of streamlining approval processes and revising capital gains tax exemptions to boost demand, particularly in metro markets. "With the sector's contribution to GDP expected to grow, budgetary support is crucial. GST input tax credit for under-construction properties can make homeownership more attainable," he adds.
As the Union Budget 2024-25 approaches, the real estate sector remains optimistic about receiving the much-needed impetus for long-term growth and sustainability.
© 2023 Rera News. All rights reserved.