Real estate is no doubt a capital-intensive industry and it functions entirely on the number of sales. The real estate developers are compelled to take loans from the market and the sales figures are the lowest in the past few years. With the rising construction & labor cost, there is nothing left for the developers. The last few years have seen a steady price rise in each and every sector, while the real estate sector has not seen any significant rise.
The real estate sector has been granted industry status, as real estate has a major contribution in the economy of India and it provides employment to hundreds and thousands of people. If the government gives a little bit of push to the real estate sector and privileges, it would help in an overall growth of the Indian economy. If the real estate sector gets industry status, it will help the realtors pull money from the market easily and cut down the capital cost so that it can help the consumers get low cost properties and the developers can see some profit.
A financial institute will be set up to provide affordable housing to low & middle class people. Under the project – “housing for all by 2022” the government is expected to build 1 crore affordable houses by the year 2019.
As per the smart city mission, the government has completed work amounting to 2 crores and a total of 99 smart cities fall under this project.
As finance minister Mr. Arun Jaitley proposed the boost of real estate sector providing affordable housing to everyone, it was appreciated widely.
“Prime minister Narendra Modi’s thrust continues to be on affordable housing, but it is very clear that he has little love for rest of the housing. The announcement of affordable housing fund shows that he is moving towards the housing for all target,” said Anarock Property Consultants Chairman Anuj Puri . “There were so many demands, on MAT, infrastructure status, external commercial borrowings, among others, nothing was talked about,” he said. PwC India partner – real estate tax Bhairav Dalal said, “affordable housing continues to get preferential treatment. Creation of the affordable housing fund will certainly ease the funding gap.”
While there was an air of dissatisfaction for the budget with people, there were many others who liked the concept of affordable housing. CMD of a renowned real estate group said “Clarity on single window clearance and GST was much anticipated. We also expected incentives for first time home buyers which would have helped increase demand and create equilibrium in the demand-supply gap. While this budget focuses on the overall growth of the economy, we will adopt a wait-and-watch approach and hope adequate measures are taken to complement their continuous endeavors to boost the real estate sector”.
The decision of relaxation in the income tax adjustment if the difference is less than 5 percent in the current budget was the icing on the cake and was well-accepted by the industry. To conclude, budget 2018 is a boon for the real estate sector and we hope to see some growth in the real estate by next year.