The budget made many happy, while some suffered a heartbreak.

Let’s see what the real estate industry thought about it.

Anuj Puri, Chairman, Anarock Properties, “With an eye on the housing needs of the urban poor and the middle class, the government has announced that it intends to construct an additional one crore homes under PMAY Urban 2.0 with an outlay of ₹10 lakh crore.”

Abhinandan Lodha – Chairman, The House of Abhinandan Lodha, “The 2024-2025 Budget is a growth-centric blueprint with profound implications on employment and employability through real estate, infrastructure, and tourism. This budget marks a significant shift towards holistic growth, focusing on affordable housing. The allocation of ₹2.2 lakh crore for constructing one crore houses in urban areas and two crore houses in non-urban areas demonstrates the government’s commitment to improving living standards. This initiative will generate substantial employment opportunities and bolster ancillary industries. The ₹1.5 lakh crore incentive for infrastructure development will enhance connectivity and drive growth across states. The PM Awas Yojana, with a budget of ₹10 lakh crore, alongside the rationalization of stamp duties, digitization of land records using GIS, and introduction of unique land parcel identification numbers for rural areas, reflect a forward-thinking approach. Additionally, the ₹10 trillion allocation for tourism and cultural corridor development will stimulate local economies. These measures are poised to invigorate the real estate sector, setting the stage for a robust economic future.”

Ashwin Sheth, Chairman and Managing Director, Ashwin Sheth Group, “The Union Budget 2024 marks a momentous breakthrough for urban development and housing reassuring a promising future for the real estate sector. The comprehensive focus on efficient urban planning, including transit-oriented development and enhanced infrastructure for water supply, sewage, and waste management across 100 large cities, will elevate the quality of urban living. The substantial Rs. 26,000 crore investment in road connectivity projects is set to create a new growth corridor, significantly boosting real estate demand in emerging regions. We applaud the government’s progressive initiative to urge states to moderate stamp duty rates and offer further reductions for properties purchased by women. Coupled with the proposed interest subsidy scheme for urban housing loans, this will revolutionize homeownership by making it more accessible. Furthermore, the commitment to developing a transparent and efficient rental housing market is a commendable stride that will benefit both property owners and tenants. As a leading real estate developer, we recognize these measures as transformative catalysts. The Indian real estate sector, poised to reach $1.04 trillion by 2029 and contribute 13 percent to the GDP by 2025, stands to benefit immensely from this holistic and forward-thinking approach to urban development and housing.”

Mohit Goel, Managing Director of Omaxe, “Budget 2024 stands out for its people-centric vision and powerfully advancing affordable housing in urban areas with a landmark allocation of Rs. 10 lakh crore under the PM Awas Yojana-Urban 2.0. As it targets to meet the housing needs of 1 crore poor and middle-class families, it is expected to boost affordable housing segment and create millions of jobs in the process.”

Kuldeep Jain, Founder and CEO, Build Capital, “Many urban housing development projects would need short or mid – term financing, which can be filled up by financial institutions. This will give a fillip to India’s untapped financing market in the real estate sector. Further, the rental housing scheme for industrial workers would also accelerate rental housing projects.”

Domnic Romell, President, CREDAI-MCHI, “The future of the real estate industry looks promising according to the 2024 budget. A big step forward is the increased funding for urban infrastructure development, which will make cities more livable overall and raise demand for homes. In addition to encouraging home ownership, the government’s emphasis on affordable housing and the extension of tax incentives under Section 80EEA will give first-time homebuyers much-needed relief. Furthermore, it is a good measure that will increase sales of residential projects and draw in more investment to lower the GST rates for properties that are still under construction. All things considered, this budget represents a promising start for the real estate industry, and we anticipate its successful execution to bring about long-term growth and development.”

Sumanth Reddy, Chairman NAR India, “We commend the Government of India for their decision to reduce the capital gains tax from 20% to 12.5%, a measure that will undoubtedly encourage greater investment in real estate. Additionally, their incentives for affordable housing will positively impact the construction sector. However, we firmly believe that reducing the GST on real estate brokerage services to 5% remains a crucial and pressing need.”

Jash Panchamia, Management, Suraksha Group, “Reintroducing the interest subsidy under the Credit Linked Subsidy Scheme is a welcome move, especially after its discontinuation in 2022. With rising home loan rates, this subsidy will provide much-needed relief for home buyers in the affordable category.”

Rajiv Agrawal, Founder Partner of Saarathi Realtors, “The finance budget for 2024-25 was majorly focused on employment, skilling, MSME, and middle-class tax structure under the new regime. An allocation of ₹1.48 lakh crore for education, jobs, and skill development was announced and all this will see increased investment in the realty sector with increased need for housing. The FM’s announcement of a Rs10 lakh crore investment in urban housing under PM AWAS Yojana Urban 2.0 is a major boost for India’s real estate sector. Additionally, the PMAY 2.0 will benefit lakhs of slum dwellers in Mumbai by providing them access to affordable and quality housing. The budget emphasizes integrating lower-income communities into the formal housing market by giving homes to the weaker sections living in slums through effective arbitration and right evacuation solutions. This will enhance their quality of life and contribute to the overall urban development and social upliftment of Mumbai’s slum areas.”

Anmoll D Shroff, Founder & CEO, Graanth Realty, “The proposed moderation of stamp duty could translate into an increased appetite for home ownership. Further, with women now comprising 33% of the Indian workforce, the reduction in stamp duty for properties purchased by them could also further incentivise real estate investments. The proposed digitisation of land records in urban areas will help to increase buyer trust and alleviate any concerns about land ownership and taxation. Additionally, development of peri-urban areas could open up new avenues and newer markets for real estate developers. The substantial investments in infrastructure, urban housing, logistics and industrial parks all indicate that the nation is progressing on the track of development.”

Anuj Goradia, Director- Dosti Realty, “The FM’s announcement of ₹10 lakh crore investment in urban housing under PM AWAS Yojana Urban 2.0 will give significant boost to affordable housing sector and will have multiplier effect on allied industries. A welcome move to reduce Stamp duty for women homebuyers and integrating these concessions to Urban Development. Also we would see the enhanced domestic savings due to change in IT slabs for the salaried class.”

Also Read: Real Estate’s Wish-list for Union Budget 2024-25

The post This is what Real Estate Industry thought about Budget appeared first on Square Feat India.

Here’s what the real estate industry got to say about the budget.

Sandeep Runwal, President, NAREDCO Maharashtra

The Interim Budget for 2024-25 presented by Union Finance Minister Nirmala Sitharaman reflects a comprehensive vision aimed at fostering inclusive growth and sustainable development in India. The focus on transforming India into ‘Viksit Bharat’ by 2047 underscores the government’s long-term commitment to national development. This vision, encapsulated in the slogan “sabka saath, sabka vikas” (together with all, development for all), emphasizes the inclusive nature of the government’s approach. The emphasis on GDP, redefined as governance, development, and performance, is a strategic move, particularly in the context of the upcoming general election. This redefinition indicates a shift towards a holistic view of economic growth, one that intertwines effective governance and sustainable development with performance metrics. It’s a narrative that might resonate well with the electorate, considering the administration’s bid for a third consecutive term. The commitment to the PM Awas Yojana Grameen, with the target of constructing 2 crore additional houses, continues the government’s focus on rural development. Achieving the milestone of 3 crore houses under the rural housing scheme and setting an ambitious target for the next 5 years reflects a significant investment in infrastructure development that addresses a basic need – housing. The announcement of a new housing scheme for the middle class is particularly noteworthy. This initiative seems to be aimed at addressing the housing needs of those living in substandard conditions like slums and chawls or those burdened by rent. By facilitating home ownership, the government is not only looking to improve living standards but also to stimulate the real estate sector and associated industries.

Dr Niranjan Hiranandani, Founder, Hiranandani Group and Chairman, National Naredco
The FM decoded an integrated and equitable growth budget outlay encompassing significant social reforms, enhancing economic growth value chain, emphasize of sunrise sectors and impetus to urban & rural housing with mega infrastructure projection. India has risen in its global leadership by paving the way for world economies, setting new standards, establishing strong geo-political allies and corroborating address geoeconomic vagaries. The buoyancy in the domestic economy is an outcome of the comprehensive GDP growth mantra in the pursuit of the Sab ka Saath, Sab ka Vikaas objective. Keeping the fiscal consolidation target at 5.1% will decrease the cost of borrowing for businesses and industries. This in turn will help stimulate economic growth, stabilize the economy and reduce the risks of inflation. The enhancement in infrastructure outlay by 11% will bode well for firming up the growth of residential, commercial and industrial real estate asset classes across the geographies. The augmentation of multi-modal corridor connectivity with new railway corridors, and doubling of airports and ports corridors will have a multiplier effect on the real estate landscape. The extension of the PMAY scheme for rural areas is in accordance with the objective of Housing for all laid by the Hon’ble PMO. A focused direction is set for addressing the housing deficit needs of the urban poor with the buy or build house motto. The continual skilling & Upskilling of the working populace will help the sector gain a competitive advantage and increase direct as well as indirect employment opportunities. Therefore, India’s vision for Amrit Kaal is stated very clearly and thus the country is on track to becoming Vikshit Bharat by 2047.

Anuj Puri, Chairman – ANAROCK Group
As anticipated, the Interim Budget 2024 made no big-bang announcements, but it continued its focus on infrastructure upgrades and building connectivity across the country. This will benefit real estate growth in not just the top cities but in Tier 2 & 3 cities across the country. The FM made some announcements that will go on to benefit the sector both directly and indirectly:
PM Awas Yojana (Gramin) – Despite all the challenges, the implementation of this scheme continued, achieving the target of close to 3 crore houses and now aims for 2 crore more houses to be taken up in the next five years.
Housing for the middle class – The Government will launch a scheme to help deserving sections of the middle class, living in rented houses or slums, or chawls and unauthorized colonies, to buy or build their own houses. This is likely to free encroachment areas like slums for easier redevelopment.
Capex outlay allocation to be increased by 11.1% to INR 11,11,111 lakh Cr, accounting for 3.4 % of GDP – This will unlock the potential for real estate development across assets because major part of this allocation will be used for various infra upgrades and new projects.
Transit oriented development in urban areas – this may give a boost to housing demand in cities and lead to rise in residential prices.
Development of iconic tourist centres – this is likely to favourably impact the hospitality sector with hotels and restaurants across categories. Moreover, long-term loans proposed to states for tourism.
Extending tax benefit to startups for another year – this may help the office real estate to rejuvenate.

Manju Yagnik, Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO- Maharashtra
The real estate industry expects a good change in response to the Interim Budget 2024’s pledge to support middle-class housing. The government’s dedication to helping those who live in chawls, unofficial colonies, slums, and rented homes achieve homeownership is a reflection of a revolutionary vision. As property developers, we applaud this initiative and anticipate working together to implement solutions for accessible homes. The finance minister’s initiative indicates a common goal for inclusive real estate development. It will boost the industry’s expansion and contribute substantially to achieving the goals of the middle-class population.

Ayushi Ashar – Director at Ashar Group & Member of Managing Committee of MCHI-CREDAI
The real estate industry expects a good change in response to the Interim Budget 2024’s pledge to support middle-class housing. The government’s dedication to helping those who live in unofficial colonies, slums, and rented homes achieve homeownership is a reflection of a revolutionary vision. As real estate developers, we applaud this initiative and anticipate working together to implement solutions for accessible homes. The finance minister’s initiative indicates a common goal for inclusive real estate development. It will boost the industry’s expansion and contribute substantially to achieving the goals of the middle-class population.

Ashwin Sheth, Chairman, Ashwin Sheth Group
We acknowledge the strategic direction outlined in the 2024 interim budget, particularly its focus on reinforcing the affordable housing sector through the increased allocation for the Pradhan Mantri Awas Yojana (PMAY). This puts a spotlight on the government’s unwavering commitment to encouraging inclusive real estate development, acknowledging the key role of affordability in comprehensively addressing housing needs. The allocation of 70% of PMAY houses to women in rural areas is of special significance and will go a long way towards providing secure living spaces and advancing women empowerment. The progress in the implementation of PM Awas Yojana (Grameen), approaching the target of three crore houses, with a commitment to taking up construction of two crore additional houses over the next five years, reflects the government’s dedication to meet the growing demand for housing in rural areas. Maintaining a delicate balance between promoting affordable housing and ensuring sustained growth across all segments is crucial, and will no doubt foster an environment conducive to growth, investment, and the holistic development of the real estate ecosystem. Moreover, the increased outlay for infrastructure to Rs 11.11 lakh crores in FY25, is a welcome move, giving further support for overall growth and development in the sector. Building on these developments, we look forward to continuing to help develop a robust and inclusive real estate landscape in India.

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

The post What’s in for the budget 2024-25 for middle class homebuyers? appeared first on Square Feat India.

In 2023, the residential real estate market experienced extraordinary growth, as new launches and home sales reached record highs. In 2023, sales of housing in the top seven cities reached an all-time high of about 4.77 lakh units, while sales of newly launched homes reached almost 4.46 lakh units.

The real estate industry’s outlook for 2024 is currently positive, but the results of the upcoming general elections will also have a significant impact on the demand for and growth in residential real estate.

The real estate industry invariably presents the Finance Ministry with a very ambitious wish list every year before the annual Union Budget. Industry status for the housing sector and single-window clearance for housing projects are standard asks and remain in place this year, as well.

Since the pace at which the issues that the real estate sector faces get resolved is generally quite slow, these expectations haven’t changed much – though they’re as pressing as ever. That said, we must have reasonable expectations for the interim budget, which will be unveiled before the general elections.

• Maximum deduction for home loans (u/s 24)

It is necessary to increase the Section 24 of the Income Tax Act’s INR 2 lakh tax rebate on home loan interest rates to at least INR 5 lakh. Doing so could stimulate a more robust market for housing, particularly in the budget homes segment, which has seen a decline in demand since the pandemic. 

• Decisive boost for affordable housing

Given how badly the epidemic affected this segment’s target audience, affordable housing has been affected severely. ANAROCK Research finds that the previously much-touted budget homes category saw a decline in overall sales – to approximately 20% in 2023 from over 30% in 2022, and nearly 40% in the period before to the pandemic.

Not surprisingly, this segment’s percentage of the total housing supply in the top 7 cities also fell to 18% in 2023 from nearly 40% in 2019.

Several interest stimulants that were offered to developers and consumers in this market over the years have expired in the last one to two years. It is imperative to revive and extend significant benefits, such as tax breaks, to encourage developers to construct more affordable housing and to make it possible for customers to acquire such homes.

• Modify the qualifying standards for affordable housing to make more buyers eligible for the additional deductions.

The Ministry of Housing and Urban Poverty Alleviation defines affordable housing as being determined by the buyer’s income, the size of the property, and its price. Affordable housing is defined as a house or apartment valued up to INR 45 lakh, with a carpet area of up to 90 square metres, located in non-metropolitan cities and villages, and 60 square metres in large cities.

The definition provided by the central bank, however, is based on the loans that banks provide to individuals so that they can purchase apartments or build houses.

The government needs to take a hard look at adjusting the qualifying cost of properties within cities’ affordable housing segment. Although the units’ defined size of 60 square metres is reasonable, the prices of up to INR 45 lakh make them unaffordable to a huge share of the target clientele.

For example, a budget of

• Release government land for affordable housing

Addressing the land shortage for this vital housing segment is also necessary. Certain lands that are owned by Indian Railways, Port Trusts, Department of Heavy Industries, etc., may be released by the corresponding government agencies. When this land is released at low cost specifically for affordable housing, it will also significantly lower real estate prices overall.

Also Read: Budget Growth Oriented, Needed More Thrust to Real Estate to Spur Demand: NAREDCO

The post Real Estate’s Expectations from the 2024–2025 Interim Budget appeared first on Square Feat India.

The year 2022 saw an amazing revival of the real estate sector with excellent property sales being recorded across housing segments. The industry hopes to continue with the same tempo in the year 2023 as well.  

We look forward to the Finance Minister granting industry demand of increasing the tax slab upto Rs. 5 lakh from present Rs 2 lakh per annum, against interest rate deduction under section 24(b) of the Act.

Property rates in metro cities are very high and out of reach for most home buyers in the lower property segment. Revising the cap from 45 lakh to 1 crore in metro cities, for home buyers availing the credit link subsidy scheme will immensely benefit customers in the affordable housing category and make housing more accessible to them.

The Government should introduce tax sops for first-time homebuyers and re-introducing GST with an input tax credit on under-construction properties that will reduce property rates thereby generating demand among homebuyers.

The government should consider expanding the SWAMIH Fund which will not only ensure completion of stressed projects but will also broaden the scope across property segments and assist developers of stressed projects in delivering them on time too to the home buyer. This will ultimately boost the confidence of the homebuyers.

The real estate sector is looking at continuation of a robust housing demand in 2023 and developers expect the government to play a more constructive and supportive role. A robust housing sector will complement infrastructure development and will be a catalyst to the growth of the economy  as well.

Pritam Chivukula, is Co-Founder & Director, Tridhaatu Realty and Treasurer, CREDAI-MCHI

Also Read: Real Estate looks for enhanced impetus in Union Budget 2023-24

The post BUDGET EXPECTATIONS FOR THE REAL ESTATE SECTOR appeared first on Square Feat India.

India Inc. has already started pinning hopes on various economic reforms in the upcoming Union Budget 2023-24. Unavoidably, there is quite a bit of overlap with previous years in the form of recurring demands which have, so far, not been or insufficiently met. 

1. The demands for single-window clearance and industry status for real estate are among the recurrent ones, and have yet to be addressed. The sector hopes that the forthcoming budget will finally address it.

2. The government must offer more incentives to boost affordable housing. To a noticeable extent, the pandemic derailed the affordable housing growth story since early 2020 – one segment which the current government has rightly stressed on since taking charge in 2014. The affordable housing supply by private players has reduced significantly since Covid-19, largely because its buyer class was impacted economically and hence went into wait and watch mode. Now, there is a need to make this segment attractive again, not least of all because it resonates well with the government’s housing for all initiative.

3. There is an express need for more tax sops for homebuyers as well as investors. The INR 2 lakh tax rebate on housing loan interest under Section 24 of the Income Tax Act needs to be hiked to at least INR 5 lakh. This will add momentum to housing demand, particularly in the affordable segment

4. The Budget should offer a degree of personal tax relief, either by ways of lower tax rates or by readjusting tax slabs. Doing so would also help boost housing absorption. The last increase in the deduction limit under Section 80C (to INR 1.5 lakh a year) was in 2014. Another favourable revision is long overdue, though it is admittedly unlikely. Instead, we may see the Budget further incentivising MSMEs and SMEs that are still struggling post the pandemic.

5. Government spending on infrastructure has been exemplary, and may get a further boost in the forthcoming budget. The positive correlations of infrastructure development with all real estate asset classes is well established.

6. Perhaps most importantly, the government should seriously consider revising the price bandwidths for homes to qualify as affordable housing to align with the market dynamics of different cities. The size of units as per the current definition (60 sq. m. carpet area) is fairly appropriate, but the catch-all pricing band of up to INR 45 lakh for affordable housing is definitely not appropriate across most cities.

For instance, a price band of INR 45 lakh or below is far too low in a city like Mumbai, where it should be increased to INR 85 lakh or more. In other major cities, the qualifying price band should be increased to INR 60-65 lakh. Such a move would  have more homes qualifying as affordable housing, and many more homebuyers would be able to avail the current benefits like reduced GST at 1% without ITC, and other government subsidies.

Also Read: This Maha Budget announcement set to benefit Real Estate

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