Business

Favourable & Bold Budget for Real Estate

Finance minister Nirmala Sitharaman presented the Union Budget 2019 in the Parliament on Friday. The first Budget of Narendra Modi government's second tenure is the maiden one for Sitharaman, who is the second woman finance minister of India after Indira Gandhi.  India's real estate sector has a reason to cheer as Finance Minister has announced a range of sops for real estate developers as well as homebuyers in the Budget. On many fronts, this is a favourable and bold budget for the real estate industry.
Here are the key takeaways decoded by the real estate industry experts:

Navin Makhija, Managing Director, The Wadhwa Group
The first budget announcement by the re-elected Government has brought some cheer to the real estate industry.

Focus on Affordable Housing
Much on the expected lines, the government has announced to continue with its thrust for Affordable Housing. The Government aims to achieve their target of Housing for All by 2022 through Pradhan Mantri Awas Yojana (PMAY). This can be reiterated from the fact that it has sanctioned 80 lakh houses under PMAY Urban and additional 1.95 crore houses proposed to be provided under PMAY Rural.

The government has been consistent with its efforts in addressing affordable housing, be it giving infrastructure status to this segment in the previous budget to exemption of Rs 1.5 lakh in income tax on home loans under affordable housing in this budget. This is a big move as it will benefit a broader segment of home buyers and increase demand going forward.

Addressing NBFC crisis
Also the support of Rs. 1 lakh crore by Government to NBFCs will help solve liquidity crisis to some extent which will indirectly help the recovery of the real estate sector.

Infrastructure Push
The Government has also focussed on a firm infrastructure push by announcing Rs 100 lakh crore investments. This will certainly boost the real estate sector and also help in employment generation.

Gaurav Gupta, Director Omkar Realtors & Developers
Focus remains on affordable housing
The first Union Budget announced under the re-elected government was inclined and focused towards affordable housing. Additional exemption in income tax on home loans under affordable housing by 1.5 lakhs for homes upto 45 lakhs is a good step by the Government. This will encourage more and more fence sitters and first-time home buyers to take quick decisions regarding property purchase. It’s a welcome move and we are hopeful that the customers and investors will show interest in the affordable housing sector. This move is expected to result in some momentum in the beleaguered real estate sector.

Hiral Sheth - HOD, Marketing, Sheth Creators
The expectations were quite high as Finance minister Nirmala Sitharaman presented her maiden budget showing thrust on affordable housing. The major highlight of the budget was the proposal of the additional tax deduction of Rs 1.50 lakh on interest paid on home loans taken up to March 2020 for purchase of an affordable house valued up to Rs 45 lakh. This move is expected to benefit the homebuyers on a large extent and will bring the fence-sitters back in the market driving demand.  The Government’s support to the NBFC sector will address the liquidity crisis which has spread its wings from past year or so. Also, the reforms to promote rental housing will provide a much needed boost in Government’s vision of Housing for All. The allocation of Rs 100 lakh crore investments for infrastructure will eventually boost the residential and commercial markets thereby propelling the growth of the real estate industry.

Sarojini Ahuja - VP, Sales & Marketing, Transcon Triumph
The Government will be undertaking several reforms to promote rental housing. With regards to the housing shortage in the country, this will be a big boost to the real estate sector. The Government also proposes NRI portfolio investment route to be merged with foreign portfolio investment route. This will lead to increase in NRI investments in Indian capital market.

The decision to allow foreign institutional investors to subscribe to REITS and INVITs is also a welcome move. The Government has also proposed to relax local sourcing norms for FDI.

FDI in real estate will provide a significant boost to the sector in terms of greater foreign capital inflows thus creating more job opportunities and revitalizing the growth of the realty sector.

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