Real estate developers, who have been badly affected by the demonetisation move, today said it's a "good Budget" for the sector
Real estate developers, who have been badly affected by the demonetisation move, today said it’s a “good Budget” for the sector that would boost supply and demand of affordable homes and thereby help in revival of the property sector.
The government has been accommodative of the concerns of the realty sector and met the industry’s long pending demand to accord infra-status to affordable housing, they said. Relaxation on long term capital gains, joint development agreements, tax rebates for builders on unsold stocks would provide a big relief to the real estate sector, which is facing a multi-year slowdown, developers and consultants said.
“It is a good budget. Infrastructure status to affordable housing will help in accessing cheaper funds for the development of low-cost homes,” realtors’ apex body CREDAI President Getamber Anand told PTI. He said more developers would enter into affordable home projects with the change in the eligibility norm to carpet area from built up area as well as clarity on applicability of 30 sq meter and 60 sq meter criteria.
Realty major DLF CEO Rajeev Talwar said: “It is excellent and balanced Budget. For housing it is an unprecedented Budget. Infrastructure status to affordable housing will mean cheaper cost of funding and lower tax to developers. Supply of affordable homes will increase, so prices will be lower”. Emaar India CEO Mr Sanjay Malhotra said affordable housing segment getting the Infrastructure status along with increased allocations under NHB and PMAY-Gramin would enable larger funding available to home buyers and developers at a lower cost and also make the sector eligible for various incentives.
Property consultant JLL India Chairman and Country Head Anuj Puri said the Budget gives a big boost to the affordable housing but missed out on giving any additional income tax incentives to first-time home buyers or providing higher tax savings on housing loans and house insurance premiums. NAREDCO President Parveen Jain said: “Affordable housing being included under infrastructure will now be able to receive liquidity support from a variety of funds such as pension funds and insurance firms”.
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Knight Frank India CMD Shishir Baijal said, “It is positive that the real estate sector has come in the central spectrum of the Union Budget. The real estate sector, which was the hardest hit by demonetisation move, will be one of the major beneficiaries of this budget.” Providing infrastructure status to affordable housing will not only bring the cost of financing down but will also open up additional avenues for developers to raise funds, he added.
The shift in eligibility criteria for affordable housing from built up area to carpet area will increase the unit size by 20-30 per cent and would offer home buyers the benefit of owning larger units, Baijal said, adding that this would also encourage leading real estate players to enter this segment. CBRE India and South Asia Chairman Anshuman Magazine said the infrastructure status to affordable housing is indeed an important step to promote access to priority lending thereby spurring supply of low cost housing units.