Homebuyers from projects including Avant Hillways, Vision Heights, and Shubham Trident received possession of their apartments, signaling the fund’s success in reviving stalled housing developments. The SWAMIH Fund, established in 2019 and managed by SBI Ventures Ltd., a subsidiary of the State Bank of India, was designed to provide last-mile financing to stressed and brownfield residential projects.

Speaking at the event, Sitharaman emphasized the government’s commitment to addressing housing sector challenges. “The SWAMIH Fund has played a crucial role in ensuring that thousands of families who had been waiting for their homes for years can now finally move in. This initiative reflects our dedication to reviving distressed projects and restoring confidence in the real estate sector,” she said.

Mr. Prem Prabhakar, Managing Director and CEO of SBI Ventures Ltd., underscored the impact of the fund, stating, “With the vision and support of the Government of India, this fund has enabled the completion of numerous housing projects, providing long-awaited relief to homebuyers.”

As India’s largest social impact fund for the real estate sector, SWAMIH operates under the sponsorship of the Ministry of Finance, addressing funding gaps and ensuring financial stability in the housing market. By targeting distressed projects, the fund is also stimulating credit growth and facilitating access to home loans, contributing to broader economic resilience.

The successful completion of 50,000 homes underlines SWAMIH’s role in stabilizing the real estate sector while supporting India’s economic recovery. The initiative continues to be a crucial mechanism for assisting homebuyers affected by stalled developments and driving inclusive growth in the housing market.

Also Read: budget expectations for real estate

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In a significant policy shift, Finance Minister Nirmala Sitharaman has proposed an amendment to the Finance Bill, 2024, that offers taxpayers a crucial choice regarding Long-Term Capital Gains (LTCG) tax rates. The amendment allows property owners and investors to select between a 12.5% LTCG tax rate without indexation or a 20% rate with indexation for properties acquired before July 23, 2024.

This move, which comes after earlier backlash over the proposed elimination of indexation benefits in Budget 2024, is seen as a vital relief for the real estate sector. Industry leaders have welcomed the amendment, highlighting its potential to mitigate concerns and support continued growth in the sector.

Industry Reactions:

Prashant Sharma, President of NAREDCO Maharashtra, expressed strong support for the amendment. “We welcome this crucial decision by Finance Minister Nirmala Sitharaman,” he said. “The flexibility to choose between a 12.5% LTCG rate without indexation and a 20% rate with indexation is a significant relief for the real estate sector. This amendment ensures that homeowners and investors are not unduly burdened by the tax changes and helps maintain investor confidence.”

Pritam Chivukula, Co-Founder and Director of Tridhaatu Realty and Vice President of CREDAI-MCHI, echoed similar sentiments. He praised the balanced approach of the amendment, noting that it addresses stakeholder concerns and provides much-needed flexibility in managing tax liabilities. “This decision will encourage continued investment in real estate and foster confidence among developers and homebuyers,” he added.

Rajeev Ranjan, Co-Founder and CEO of The Mentors Real Estate Advisory Pvt. Ltd, highlighted the benefits of the amendment for investors. “Allowing taxpayers to choose between the two tax rates is a significant relief and empowers them to align their tax strategies with their financial goals,” he said. “This flexibility is particularly valuable in a diverse real estate market.”

Vedanshu Kedia, Director of Prescon Group, commended the government’s responsiveness to public concerns. “The amendment reflects a deep understanding of the complexities involved in tax planning,” he remarked. “By providing an option for a more beneficial tax regime, the government is fostering a healthier and more resilient real estate market.”

Overall, the proposed amendment is seen as a positive development for the real estate sector, offering a balanced approach to tax calculations and supporting sustained growth and stability in the market.

Also Read: New LTCG Tax Options Boost Real Estate Market

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With Union Budget 2024-25 set to be tabled in July, the real estate sector pins renewed hope on the Modi 3.0 regime. Expectations are high for tax reliefs and other sentiment boosters. The future of the overall industry also depends on unfettered infrastructure deployment to support and improve urban living standards as well as to develop and promote newer areas. 

Will the government finally decide to give in to the long-standing demand for industry status for the entire housing sector? Will it take ‘real’ measures to revive the affordable housing segment, which has been on a steady decline after the pandemic? 

The Indian housing sector remained upbeat in 2024 till date, with housing sales and new launches creating new peaks in the top 7 cities. Sales reached an all-time high at about 4.93 lakh units in FY23-24, while 4.47 lakh units were launched.

However, this momentum must continue in the future too – and the current growth trajectory is skewed towards mid-range and premium housing. Considering the specific housing needs of India’s lower-income groups, this momentum cannot ride solely on higher-priced homes while affordable housing continues to languish.

As per ANAROCK Research, the sales share of affordable housing reduced significantly after COVID-19 – from over 26% in 2022 and over 38% in 2019 to approx. 20% in Q1 2024. Due to low demand, this segment’s share of the overall housing supply in the top 7 cities also fell to 18% in Q1 2024, from nearly 40% in 2019.

Many interest stimulants previously extended to buyers and developers of affordable housing have expired in the last two years. This important segment must be revived with high-impact measures like tax breaks – for developers, so that they will focus more on affordable housing, and for buyers to improve affordability.

Other measures to reignite affordable housing would be:

Credit-linked subsidy scheme under PMAY

This scheme for EWS/LIG, which expired in 2022, should be revived to incentivise first-time buyers of affordable homes across cities. This will onece again invigorate demand in this segment. Subject to criteria specified under government guidelines, CLSS was previously available for housing loans to EWS/LIG buyers in new constructions, and for the addition of rooms, kitchen, toilet etc. to existing dwellings. Also, under PMAY (Rural), one could avail of this subsidy for all ‘kaccha’ homes being converted into ‘pucca’ ones, provided they fulfil the eligibility criteria.

Re-introduce 100% Tax Holiday for affordable housing developers

To boost supply and incentivise developers to build more affordable housing, the government can re-introduce the ‘100% Tax Holiday’ benefit they previously enjoyed under section 80-IBA in the Finance Act, 2016. This section provided for major tax relief on the profits earned from developing and building affordable housing projects.

Tweak definition of affordable housing criteria to widen additional deductions benefits to more buyers

According to the Ministry of Housing and Urban Poverty Alleviation, affordable housing is defined based on property size, price, and buyers’ income. For instance, affordable housing is a house or flat with carpet area up to 90 sq. m. in non-metropolitan cities and towns, and 60 sq. m. in major cities and valued up to INR 45 lakh for both. The central bank’s definition, on the other hand, is based on the loans given by banks to people for building a house or buying apartments.

The government must seriously reconsider revising the pricing of homes within the affordable housing budget, taking into consideration city-specific market dynamics. As per the current definition, the size of units at 60 sq. m. carpet area is appropriate. However, prices of units (up to INR 45 lakh) are not viable across most cities.

For instance, for a city like Mumbai, a

Also Read: REAL ESTATE SECTOR’S EXPECTATIONS FROM INTERIM BUDGET 2024-25

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NAREDCO Maharashtra organized a Knowledge Session ‘Realty of Budget 2023’ with real estate industry experts, to analyze the Budget and its impact on home buying and real estate industry. Dr Niranjan Hiranandani, Vice Chairman, NAREDCO; Adv Anil Harish, Partner, D.M. Harish & Co., Advocates; Shri Rajiv Sabharwal, MD & CEO, Tata Capital Ltd.; Shri Srini Sriniwasan, MD, Kotak Investment Advisors Ltd.; Mr. Sanjay Dutt, MD & CEO, Tata Realty & Infrastructure Ltd. and Mr. Navin Makhija, MD, The Wadhwa Group formed the august dais along with Mr Anuj Puri, Chairman & Founder, Anarock who moderated the session. 

Adv. Anil Harish, Partner, DM Harish & Co analyzed the Budget and its implications. 

Sandeep Runwal, President, NAREDCO Maharashtra welcomed the budget which he said is a fine balance between sustainable growth and financial stability. He applauded the honorable Finance Minister, Smt. Nirmala Sitharaman for her hard work in meeting the aspirations of the people through lowering income tax brackets and driving forward growth with increased infrastructure budget.

Adding further he said, “Pradhan Mantri Awaas Yojana (PMAY) is a lofty initiative by the central government, aiming to bring affordable housing for all. The staggering 66% increase in funding for the scheme to Rs 79,000 crore for the next fiscal year is expected to address more than 55% of the estimated deficit in funds for projects under the scheme, providing a huge impetus in providing housing to those in need.”

“The First Budget of Amrit Kaal, Budget 2023, struck all the right chords. Income Tax Reforms ensured more disposable income in the hands of citizens to accelerate demand-based growth. The government has also taken an honest effort to reduce taxes from all the tax slabs which is a great initiative,” added Mr. Runwal.

Dr. Niranjan Hiranandani, Vice Chairman, NAREDCO opined, “The real estate industry has a long way to go in realizing the goal of housing for all. India needs a greater push in the affordable urban and rural housing space for making housing possible to a last mile person, which requires a consistent growth impetus to the real estate sector. India needs to create a surplus of houses. Measuring the demand for housing, Dr. Hiranandani mentioned that the Budget could have given certain deductions against home buying and restructuring of home loan installments, which could have softened the burden on the home buyers.  

Adding further Dr. Hiranandani said, “It is a fantastic budget overall but not much has been done for the housing sector. Home loan EMIs need to be restructured. There is a surplus of stock in clothing and other sectors, but where is the surplus in housing stock, he asked. We need to further develop the concept of rental housing that is viable. In the US, 50% of the population lives in rented houses all their lives. He goes on to add that no one will invest in rental housing as returns are not working. They will rather invest in commercial real estate.”

“The government needs to set up bodies like charitable trusts set up during British rule or chawls which provided people with inexpensive accommodation. The aim is to provide every citizen in the next 5 to 10 years with a house to live in; be it owned or rented. Over 50% of Mumbai’s population lives in the slums. This goes on to show that we have not done enough in providing better housing for our citizens. The 66% increase in the PMAY outlay to Rs. 79,000 crores are not for urban housing alone but for both urban and rural housing.”

Navin Makhija, MD, The Wadhwa Group observed that the Government wanted to take the development agenda to tier II and tier III cities and it was an opportune time to look for development opportunities in such areas. Makhija envisaged that due to stiffening of interest rates the cost of buying affordable housing had gone up. 

He further went on to add, “We need to focus on affordable housing bringing in more investments into this segment. It has become slow due to increase in home loan interest rates and also input costs have gone up. On the other hand, commercial realty and IT are doing well. Prices have firmed up as well as occupancy. Huge allocations have been announced for various infra projects but we need to see if execution at the ground level is taking off. The direction is right but the pace at which projects are being completed is the big question.” 

Assessing the impact of removing the Income Tax Act’s Section 54 that allowed indexation of capital gains, the experts felt that the move could impact the housing sales. Srini Srinivasan, MD, Kotak Investment Advisors Limited said, “We were expecting a more populous budget with taxes going up, but that did not happen. The cap of Rs 10 crore on the capital gains deduction will impact the luxury housing segment, mainly in Mumbai. There will be bunching of sales till 31^st March 2023. Additional tax on REITS was a dampener but overall the budget on housing was a good one.”

Rajiv Sabharwal, MD & CEO, Tata Capital Ltd., lauded the Finance Minister’s efforts to balance both the short and long-term growth measures. He maintained that though the Budget has not proposed any new proposal for the real estate industry, it has not dented the ongoing pace of growth, as the real sector had caught a good momentum due to the Government’s push for the past two years.” 

He further added, “More could have been done in reducing income disparity. The income tax exemption rebate being increased from Rs. 5 lakhs to Rs. 7 lakhs will impact the housing sector positively as individuals will benefit with more money in their hands. Home buyers will invest in a project with good amenities coupled with quality construction and timely delivery. There has been no impact on the realty market due to home loan interest rate increase.  The government should find ways to control the prices so that the unit price does not go up for the home buyer.”

Agreeing that a big boost to urban infrastructure will spur investments, the experts pressed on the need to have cooling off the cost of capital in India. Anuj Puri, Chairman & Founder, Anarock while moderating the session cautioned that the foreign investors were finding the US market cheaper than India and preferring to invest there than India.  

Sanjay Dutt, MD & CEO, Tata Realty & Infrastructure Ltd., mentioned that while the USA was becoming cheaper to the investors, they preferred staying there instead of coming here. India needed to be consistent with its policies. The government has not done anything to disrupt the cost of capital in the country, which is good and welcomed.

Also Read: Union budget 2023-24 focuses on infrastructure development, green growth; thrust on affordable housing 

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By Varun Singh

The Union Budget for the coming financial year will be presented by the finance minister N Sitharaman today.

There are lots of expectation from the budget by the real estate industry.

Here are some of the expectations from the developers.

Sandeep Runwal – President, NAREDCO Maharashtra and Managing Director, Runwal Group
Real estate being the second-highest employment generator and contributing more than 8 percent to the economy, the expectations from the 2022-23 budget are high and the industry is awaiting big announcements that will alter the future of the real estate sector.

The Central and State governments rolled out several reforms and incentives during the past year to revive the economy from the ill effects of the pandemic.

The Government will continue to put in its sincere efforts in pushing affordable housing. The cap of Rs. 2 lakh per annum against interest rate deduction under section 24(b) of the Act needs to be hiked to at least Rs. 5 lakh along with removing the 45 lakh cap from affordable housing, which will boost the affordable and mid-segment housing in a big way.

We also expect the government to continue promoting the affordable rental housing schemes by announcing tax reliefs for rental housing projects, which will fast track the pace of investments in these schemes. The Government’s commitment to boost both affordable and rental housing will help achieve their overall goal of Housing for All. We expect the Government to introduce tax sops for first-time homebuyers and look forward to re-introducing GST with an input tax credit on under-construction properties that will generate demand among homebuyers. There is a specific need for tax relief to spur significant real estate growth, along with single window clearance and lowering of home loan interest rates that will definitely go a long way in improving the market sentiments. We also urge the Government to reintroduce subvention schemes, helping the homebuyers to align their payments and encourage them to take a decision on home buying.

The quantum of the SWAMIH stress fund needs to be enhanced along with strengthening the financing institutions to generate adequate liquidity and help the completion of stuck realty projects.

In addition, the ‘industry status’ for real estate has been the long-standing demand by the sector; we anticipate that the Government can address this concern too.

Overall, the industry expects the Government to take substantial measures to strengthen the real estate sector as well as the entire economy, by addressing critical issues, ensuring job creation, and sustaining growth.

Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Hon. Secretary, CREDAI MCHI
The sector is seeing a strong recovery from the pandemic crisis. Residential sales in the top 8 cities have bounced back to near pre-COVID levels. While the real estate sector is looking at a robust housing demand revival in 2022. The developers expect the Union Budget 2022 to play a supportive and enabling role.

The upcoming budget shall bring a lot of hope to the real estate sector. The budget shall offer the much-needed push to the infrastructural development of the country. Falling housing inventory levels and a much healthier banking system are the perfect platforms for the budget to anchor a strategic roadmap for the next decade.

We should look at a multi-dimensional approach focused on the availability of improved & low-cost credit, forward-looking FDI inflow which allows foreign investment in completed housing, and inclusive participation in the start-up ecosystem through a dedicated fund focused on real estate innovations and digitization could go a long way in making the sector excel in 2022.

The outlook is a positive upsurge because of the strategic decisions and changes that the Government brought into action to tackle the Covid crisis that gave an overall boost to the home buying sentiment especially in these difficult times with the onset of the third wave.

Additionally, developers are hoping for provisions that will benefit the growth that includes the deduction of loss under house property, reduction in the income tax burden on rental housing and long-term capital gains on capital assets, relaxations in provisions for REITs for faster recovery in commercial real estate.

We have also written to the government to urge for a reduction in tax for investments on Real Estate Investment Trusts (REITs) and, also demanded tax-neutral consolidation of businesses through the mergers, in order to help the homebuyers who got trapped in delayed housing projects.

Shraddha Kedia-Agarwal, Director, Transcon Developers
Amid the pandemic, the Government has recalibrated its approach towards remobilizing the economy and introduced various reforms to ensure adequate liquidity in the system such as keeping the interest rates low, additional liquidity support to NBFC and HFCs. RBI’s accommodative stance for such a long duration too helped mitigate the effects of Covid-19 on businesses and was a key to the recovery of real estate and the overall economy. These reforms have eventually proven to be positive for the economy in the long run. The outlook on India’s economic growth in the coming years looks very positive with the way the Government has tackled the Covid crisis.

The upcoming budget needs to be more attractive to foreign investors as it will be an ultimate platform to announce further incentives which will attract more foreign investments into the sector. Considering the rupee’s recent muted performance, this budget is an ideal time for reforms targeted at foreign inflows into India. We expect the government to reduce the tax on interest income which will help accelerate capital inflows to India. Liberalizing foreign investment norms in real estate is another widely expected move.

The residential real estate market in India has become more lucrative for NRIs as a result of the increased transparency due to RERA and ease in investment norms. Given their efforts towards nation building, the NRIs expect the forthcoming Budget to reward them with sops such as ease of compliance under the Income-tax Act and reduction in withholding tax rates, among other relaxations.

Real estate acts as a major growth driver for the Indian economy. The government must announce encouraging moves that can further attract foreign investments into the sector and help in huge employment generation.

Himanshu Jain, VP – Sales, Marketing and CRM, Satellite Developers Private Limited (SDPL)
The real estate sector was already in focus for the government in 2021, we expect a similar and a more refined response this year.

The government has already played an immense role in driving the momentum of the industry with various announcements which benefited the developers and homebuyers last year. We have already addressed the positive outcome of the decisions, with a huge hike in sales all across the country.

The budget 2022 will bring further relaxation to the sector if the government plans on further extending the already introduced relaxations.

Additional benefits like GST waiver for under-construction homes hike in Rs 2 lakh tax rebate and incentives for private sector investments in the affordable housing segment; among others can be some of the measures Finance Minister Nirmala Sitharaman should consider in the upcoming Union Budget.

Bhushan Nemlekar, Director, Sumit Woods Limited
The government and the Reserve Bank of India (RBI) have done enough to bail out the real estate sector from depression, as it remains one of the most precise bellwethers of the state of India’s economy. The budget for 2022 will surely bring a positive outlook for the sector and we look forward to further emphasis on tax incentives, GST waivers, and Affordable housing this financial year. A series of key decisions taken by the government recently to revive the realty sector has improved consumer confidence and the impetus given to the residential sector is expected to yield positive results in the near future.

Meanwhile, the Economic Survey was announced on Monday.

Ramesh Nair, CEO, India and Managing Director, Market Development, Asia, Colliers had this to say on the survey report.
The 2022 Economic Survey infuses optimism for what lies ahead. The projection of 8-8.5% GDP growth for fiscal 2022-23 will be led by supply-side reforms and easing of regulations. The survey also indicates that consumption is growing and inching closer to the pre-pandemic levels. Total consumption is estimated to have grown by 7.0 per cent in 2021-22 with a significant boost from government spending. The Survey spells out that rising capital expenditure by the government on infrastructure and an uptick in the housing cycle has been responsible for reviving the construction sector. This has resulted in the consumption and production of steel and cement consumption to reach pre-Covid levels. We expect Budget 2022-2023 to announce reforms and incentives that will continue to boost consumer spending and thus aid in the overall revival of the real estate sector.

Also Read: Bhushan Kumar Of T-Series Paid Rs 167 Crore For Juhu Bungalow

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By Varun Singh

Union Minister for Finance Nirmala Sitharaman on Thursday handed over possession to homebuyers virtually as Government of India’s Special Window for Affordable & Mid-Income Housing (SWAMIH) completed its first residential project.

The residential project – Rivali Park, located in suburban Mumbai, was the first housing project in India to have received funding under the SWAMIH Fund. The SWAMIH Fund was launched by Sitharaman in November 2019.

Rivali Park Wintergreens is the first investment by the SWAMIH Fund and is also the first project to get completed. It is a large project spread over 7 acres consisting of 708 units of various configurations. The project is “Rivali Park Wintergreen” developed by CCI Projects Pvt Ltd (CCIPPL), an associate company of Cable Corporation of India Ltd.

Addressing the virtual event, Finance Minister Sitharaman said she is very pleased to see that SWAMIH Fund has completed its first residential project. More so, it is an important achievement since the SWAMIH Fund has worked its way through the difficult period of COVID-19 pandemic, she added.

The Finance Minister said that the Government of India had stepped in to provide funding to the stressed affordable and mid-income housing projects thereby giving relief to the home buyers who had invested their hard earned savings. Smt. Sitharaman said the Government believes that once these homes are constructed and completed, a large amount of capital locked up in these projects will be released.

The Finance Minister said it will provide employment to construction workers and will provide impetus to the allied industries such as steel and cement. Further, it will improve portfolios of Banks and NBFCs and significantly improve the economic sentiment in the nation.

Sitharaman complimented and congratulated the SBICap Ventures team for converting a policy announcement into an on-the-ground funding institution that has achieved significant progress within a short time span.

Commenting on the completion of the project, Rohan Khatau, Director, CCI Projects Pvt Ltd, Developer of Rivali Park said, “This is a remarkable milestone in our commitment towards delivery & handover of the Wintergreen phase to our customers, who have placed immense faith in us and our vision to create a holistic experience. We are very pleased and grateful to have traversed the last mile with timely financial aid and intervention from the SWAMIH Investment Fund. We have obtained Occupancy Certificates (OCs) for the entire project and have commenced the possession process that will help us deliver the promise of a dream home to our valued homebuyers.”

Government has the vision of las mile funding so that projects are completed.

Durga Shankar Mishra, Secretary, Ministry of Housing and Urban Affairs (MoHUA), in his address said that the real estate industry is the second-largest employment generation sector in India and MoHUA has taken several steps in the last couple of years so that the real estate sector not only survives the cycles but thrives, such as RERA, lowering GST rates, PMAY scheme etc. He further added that MoHUA shared the vision of Ministry of Finance in this last-mile funding endeavour to complete the projects.

About SWAMIH:
In a short time-span of 1.5 years since inception, the SWAMIH Investment Fund today is one of the largest private equity teams in India and has done commendable work despite COVID-19 related restrictions. The Fund so far has given its final approval to 72 projects that will complete 44,100 homes, while 132 projects have received preliminary approval, which will complete an additional 72,500 homes. Thus, the Fund is targeting to complete an aggregate of 1,16,600 homes. This Fund is bridging the trust deficit between homebuyers and developers by completing construction and delivering homes without depending on any other source of finance.

Also Read: Mumbai Project Under SWAMIH Nears Completion

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By Varun Singh

It is very rare to see developers praising the government. However, here’s a story where the developer is all praise for the Central Government’s SWAMIH Funds.

Mumbai based real estate company CCI Projects Pvt Ltd, which is developing a real estate project Rivali Park on a 14 acre land parcel claims that his project benefited a lot from the Central Government’s SWAMIH Funds. Of the 14 acres , 7 acres of land is under development.

It was amongst the first few projects in the country that was sanctioned the funds.

The ‘Special Window for Completion of Construction of Affordable and Mid-Income Housing Projects’ (SWAMIH) fund was announced in November 2019.

CCI Projects Pvt. Ltd. the developer of Rivali Park, approached the authorities seeking funds under SWAMIH for its project.

Rivali Park is located in Borivali East and the phase Wintergreen for which the SWAMIH funds were used comprises of 708 apartments.

When the scheme was launched in 2019, many weren’t sure whether they would be able to get the funds soon.

However, CCI’s Director Rohan Khatau claims he was amongst the first to apply and by February 2020 they even received a sanction.

The funds are industry friendly, as the interest rates aren’t high and EMI’s aren’t to be paid every month.

“We got a sanction of Rs 180 crore from SBI Caps under SWAMIH Funds and have drawn out about 65% of the funds to complete the project,” said Rohan Khatau, Director, CCI Projects Pvt. Ltd. the developer of Rivali Park.

CCI’s Rivali Park for a long time was facing several difficulties and for them SWAMIH funds came as a blessing.

Khatau claims that after the lockdown was eased the project work commenced at speed.

The project is near completion and homebuyers are expected to start coming in soon and occupy the flats.

State Governmnet’s Stamp Duty Cut Attracted Homebuyers

Even the state government’s stamp duty cut from September 2020 till March 2021 has benefited the real estate industry and also the homebuyers.

Many homebuyers are right now booking flats so as to save on the stamp duty.

Even developers instead of holding on the inventory are selling the flats because even they feel it is a better option right now.

Also Read: MahaRERA Is Tracking Investment Worth Rs 8 Lac Crore

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By Varun Singh

Devendra Fadnavis has promised to take up the various demands of the developer community with the centre and even assured them help.

He spoke to the builders via a webinar which was held on Tuesday and attended by over a 1,000 developers from the Mumbai Metropolitan Region.

The MMR Action Committee of CREDAI MCHI, has launched an online petition and sought close to 35,000 signatures. Fadnavis at the webinar told the developer community that their “logical, genuine and reasonable” demand for a one time debt restructuring will be taken up with the Finance Minister.

Fadnavis even tweeted the same and tagged FM Nirmala Sitharaman, who even responded to the tweet.

Fadnavis in his tweet said, “Received online petition from CREDAI-MCHI, signed by almost 35,000 developers. The real estate industry requires many interventions from State & Central Government. I have assured them to take their petition to Hon FM @nsitharaman ji ! “

To which the FM replied, “Thanks Devendra ji. Will receive the petition that you shall send. Assure you that we’ll give it a fresh and open-minded look.”

The main issues of builder community is that of restructuring of loans, pushing banks, and other financial institutions like NBFCs to pass on benefits of repo rate cuts to the consumers, input tax credit to be given under GST.

Fadnavis during the webinar even expressed his stated that banks, but for SBI, have not yet passed on the benefit of the repo rate cut to the end consumer.

According to MMR action committee spokesperson Ajay Ashar, banks are in a very comfortable position when they deal with real estate developers. “They get an ROE of 22%-25% which is the highest in the world. Banks also enjoy very high net interest margins on lending to real estate, yet the developer community gets a step-motherly treatment,” he said.

CREDAI MCHI, President Nayan Shah pointed out that nothing from the Rs 20 lakh-crore package announced by the centre benefits the real estate developers. “The economy as a whole will revive itself if real estate survives as every paisa given to the developer goes into the economy straight,” said Shah

Only last week when another developer body NAREDCO held a webinar with Union Minister Piyush Goyal he asked builders to reduce price to survive the downturn.

Also Read: Reduce prices to survive or suffer: Goyal to builders

The developer bodies have made various representations to state and central government, and are hoping that their demands are met.

Developers in the past have also asked for ready reckoner rates to be slashed and amend the Income Tax Act that penalizes seller and buyer for buying below 10 per cent of the ready reckoner rates.

Price reduction not solution, research by builder body

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By Varun Singh

The builder community is expecting more from the Finance Minister, Nirmal Sitharaman in the forthcoming packages she will be announcing.

After PM Narendra Modi’s speech on Tuesday declaring a total of Rs 20 lakh crore worth package to boos the economy.

FM has already announced a slew of measures to be taken to bring the economy back on track. This even included extension of six months for projects registered with RERA in different states. The builder community is quite happy with this move of the FM.

However, they have further list of demands that they want the FM to pay heed to.

CREDAI’s National Spokesperson said, “The Declaration of Covid 19 as Force Majure, extension of time lines for completion of  project under the RERA, are crucial announcements for the developer community.”

CREDAI further stated that they are hopeful that the Finance Minister  will soon announce other necessary measures too.

These measures are infusion of liquidity, de-cartelization of cement prices, restoration of supply chain to ease construction on the project sites  and help uplift the demand by giving more sops to homebuyers by increasing the tax deduction  limits for interest on home loans, thus help the sector regain momentum which remains the second largest employer.

Dr. Niranjan Hiranandani – National President – NAREDCO says, “Industry is pegging a big hope on much awaited fiscal relief to be granted to the second largest employment generating sector. Liquidity infusion will be imperative to turn around the depressed scenario of the sector.”

Builders want specific steps from FM for infusion of liquidity in the sector. Amit Modi, Director ABA Corp & President Elect CREDAI Western UP, said, “We still feel that specific steps required for liquidity generation in the Real Estate Sector is the real need of the hour.”

Builders even want government to find out ways on re-starting of construction activities in non containment zones. Manju Yagnik, Vice Chairperson, Nahar Group and Vice President NAREDCO (Maharashtra) says, “If the Government works out ways to iron out issues with respect to restarting construction in non-containment zones with necessary precaution and supply – chain, it will help the sector in a big way.”

Some builders feel reduced interest rates on home loans will encourage home buyers to invest in real estate.

Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani said, “During the lockdown, the construction industry has nearly come to a standstill thus negating the green shoots that had just begun appearing prior the pandemic came to the fore. In order to tackle the subdued demand from home buyers during and post COVID-19, reduction in interest rates on home loans will encourage fence-sitters to act quickly to invest in a property.

Also Read: FM Throws Lifelines to Real Estate

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By Varun Singh

The Real Estate Industry has high hopes from the Union Budget that shall be presented by the Finance Minister Nirmal Sitharaman. The budget will be presented in few hours from now.

Below are some of the expectations that, the top real estate consultancy firms like Anarock and JLL have from the Union Budget.

• Hike the INR 2 lakh tax rebate on housing loan interest rates under Section 24 of the Income Tax Act – This could kick-start healthier demand for housing, especially in the affordable and mid-segment categories.
• Personal tax relief, either by a cut in tax rates or favourably readjusted tax slabs – The last increase in the deduction limit under Section 80C (to INR 1.5 lakh a year) was in 2014 and an upward revision is long overdue.
• Include ITC benefit in GST for under-construction homes – While the GST rate on under construction properties was reduced to 5% in 2019, the previous ITC benefit was shelved. Already cash-starved developers cannot avail tax benefits for construction raw materials and the increased costs are passed on to buyers. Providing ITC benefits is a great incentive to reduce property prices and make under-construction homes attractive again.
• Immediate deployment of INR 25K crore AIF – The clock is ticking, and the government needs to act immediately. The allotted stress funds need to be utilized to full potential without delay. Completion of stressed projects will improve homebuyer sentiment and boost demand. Any further delays will result in a domino effect and add more stressed projects.
• Ease liquidity – The ongoing liquidity crunch has a cascading impact across sectors, including real estate. Project delays – the biggest fallout of the cash crunch – have severely dampened buyer sentiments. Easing liquidity will increase capital flow for developers and keep supply – most importantly of high demand ready-to-move-in homes – healthy. Increased supply also keeps prices in check.
• Improve credit off-take from banks – The NBFC crisis has hit the sector hard, and there is enough justification to warrant credit off-take. Apart from recapitalization by the government and stringent measures by RBI, the gross NPAs of banks also improved to nearly 9.1% towards September-end 2019 (against 11.2% the preceding year).
• More incentives for private sector investments in affordable housing – Despite the benefit of infrastructure status for this critically important segment, developers are unable to get funding from major banks and NBFCs at lower interest rates. The profit margins for affordable housing projects are unattractively low. 
• Speed up infrastructure development – The Government’s hard focus on infrastructure development is beyond dispute, but its plan to spend INR 100 lakh crores on infrastructure over the next five years can only yield tangible economic results with speedier on-ground implementation. There is a dire need to iron out bottlenecks hampering infrastructure growth.
• Implement land reforms – The new lower 15% tax rate for companies looking to set up new factories can be applied only if they are able to acquire land easily. Implementation of a unique identity numbers or UID for land will bring greater transparency to India’s outdated land records system and help attract more foreign investors and limber up the approval procedure for real estate projects. 
• Extension of the Sunset Clause of Special Economic Zones: The government had introduced a sunset clause for SEZs in 2016. According to the clause, only an SEZ unit that commences operations on or before March 31, 2020, shall be eligible for an income tax holiday. Considering the challenges faced by the real estate sector in the last couple of years, there is a need for the government to extend the date and provide the required relief to SEZ units and developers.
• Increase in deduction of interest on home loans u/s 24″ An increase in the deduction of interest on home loans for self-occupation from the existing INR 2 lakh to INR 3 lakh will mainly benefit buyers in the lower and mid-income category. This is expected to incentivise homebuyers in a scenario of weak demand.
• Deduction of pre-EMI interest in the same year” Currently, pre-EMI interest (interest paid during the construction period) can be availed as a deduction only after the construction of the building is complete in 5 equal annual installments. However, homebuyers have been adversely affected due to inordinate construction delays. In order to provide timely relief to homebuyers, it is recommended to provide for the deduction in the same year of interest payment.
• Separate provision for deduction of ‘principal repayment’ on home loans: A separate provision allowing deduction of principal repayment (currently forming part of 80C deduction) will provide homebuyers higher tax benefits towards the latter stage of the loan tenure.

Within few hours it will be known how many of the above mentioned expectations are fulfilled by the Finance minister in the union budget.

Also Read: Here’s What Builders Want From The FM In Union Budget.

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