The Indian real estate sector has registered record-breaking growth numbers in 2023. Now, with the Union Budget 2024 around the corner, the real estate sector is hopeful of transformative reforms to be addressed in the announcements. By allocating resources and implementing favorable policies, the government has the potential to catalyze this sector, fostering job creation and stimulating economic activities.
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The developer community is keenly awaiting the budget announcements while expressing their key demands which, if fulfilled, will help further shape the sector’s trajectory in the upcoming fiscal year.
S K Narvar, Group Chairman, Trident Realty, says, “The budget should include a fiscal stimulus and personal tax relief by increasing the tax rebate on home loan interest rates from Rs 2 lakh to Rs 5 lakh. This will be a significant boost for millions of first-time homebuyers. In addition, the industry hopes that the government will address long-standing demands such as single window clearance and granting industry status to the real estate sector. If real estate is given industry status, developers will have easier access to loans with lower interest rates and easy financing options from institutional investors. This will be a great incentive for the developer community.”
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He further says, “Another key area for the government to consider in the Union Budget is to continue focusing on Tier 2 & Tier 3 cities and to provide more infra development funds to ensure that a larger number of projects in these cities benefit. The government should consider revising the definition of affordable housing, both in terms of value and size, to cater to a large population that has returned to their hometown and to boost housing demand in new markets.”
The sector emphasizes the pivotal role of government support in sustaining the positive trajectory observed in 2023. Developers emphasize the need for the government to introduce incentives focused on lowering prices for first-time homebuyers, thus enhancing accessibility to homeownership for a broader demographic.
Santosh Agarwal, Executive Director and CFO, Alphacorp, says, “We are anticipating a growth-oriented budget where real estate thrives as a cornerstone of progress with policies that nurture sustainable development, incentivize innovation, and foster the housing segment with significant tax breaks. The Indian real estate industry rose massively in 2023 with a slew of projects, be it residential or commercial. Maintaining similar optimism, we await the Union Budget with the provisions for the single window clearance system for greater transparency and efficiency.”
The commercial real estate sector is experiencing increased demand, driven by economic growth and positive market sentiments. The surge is attributed to innovative office concepts, pro-business initiatives, and the provision of high-quality amenities.
To further propel the commercial segment growth and drive investment, Aman Trehan, Executive Director of Trehan Iris, highlights key points and says, “The realty sector expects the upcoming Union Budget to strengthen a conducive policy framework for enhancing business operations and pulling in more foreign investors. For the commercial segment comprising office space, retail, and mall developments, the government must extend holistic support. The developer community is urging the government to facilitate project financing by directing RBI to reduce interest rates on project finance. Additionally, a grant of industry status to the sector would enable developers to obtain financing at lower rates.”
He adds, “To promote growth in the office space segment, start-ups, MSMEs, and entrepreneurship need to be supported. The budget should continue emphasizing measures to encourage consumer spending and investment to strengthen the retail space segment.”
As the sector awaits the Finance Minister’s announcement, there is hope that the budget will act as a catalyst, further reinforcing the vital role of the real estate sector in India’s economic landscape.