Developers feel that though the Budget 2020 will surely give a boost to real estate in the long run, but very little has been done for mid-income and luxury homes.
Real estate, like many other sectors, was betting big on the Budget 2020 for revival of fortunes. However, the government did very little for the sector – certainly not enough to kick-start a housing revival. Real estate, in fact, was in dire need of ‘quick fixes’ which did not materialize.
There were a few positives though. Affordable housing, for instance, continued to be the government’s focal point for real estate. The earlier tax exemptions for both home buyers and property developers have been extended for another one year.
However, “instead of making outright changes in personal tax, the FM provided options which will in any case not help boost real estate. Also, apart from the expected affordable housing push, no major benefits came in for resolving the current housing mess. The FM did not hike the Rs 2 lakh tax rebate on housing loan interest rates and made no major announcement for easing liquidity in the real estate sector. Nor did the Budget announce any measures pertaining to implementation of land reforms which could have opened up the viability for developers to procure and develop land,” says Anuj Puri, Chairman, ANAROCK Property Consultants.
In fact, rather than giving direct benefits to residential real estate as a whole, the FM laid more focus on warehousing, data centres, schools, hospitals and hospitality. The development of five archaeological sites can increase employment in the target areas and also indirectly push real estate development.
“Increasing the insurance cover of bank depositors to Rs 5 lakh from Rs 1 lakh will help increase the confidence of depositors and may lead to bigger deposits and thereby help increase liquidity in the banking system. However, no new directives about funnelling more cash into the real estate sector were announced,” says Puri.
Developers also feel that though the Budget 2020 will surely give a boost to real estate in the long run, but very little has been done for mid-income and luxury homes.
“The government’s constant focus on infrastructure growth and ‘Housing for All’ will help the real estate sector in the long term. A substantial tax benefit offered to taxpayers under the New Simplified Income Tax optional regime will add to the kitty of taxpayers in the organized sectors. A vast majority of the new-age homebuyers fall in categories specified by the government and prefer to buy houses in the primary market through financing. This move will strengthen the hands of actual end-users in purchasing and owning a home. While these steps are laudable, much is desired in terms of boosting the consumer sentiment across other categories of housing, including the mid-income and luxury categories,” Ankush Kaul, President – Sales & Marketing, Ambience Group.
Overall, industry experts feel, the Budget 2020 announced measures to boost employment, increase consumption and attract FDI. While it may have scored to some extent on these fronts, it was really a non-event for real estate.