Tag real estate sector

As Finance Minister Nirmala Sitharaman prepares to present the Union Budget 2024-25, the real estate sector is buzzing with anticipation for measures that will drive growth and stability. Key stakeholders have voiced their expectations, emphasizing the need for policies that will foster development and address longstanding challenges.

Mr. Prashant Sharma, President, NAREDCO Maharashtra:

Mr. Sharma underscores the need for enhanced tax incentives for homebuyers, advocating for increased limits on deductions under Section 80C and Section 24(b) to boost housing demand. He also calls for a single window clearance system to streamline project approvals and incentives for affordable housing, including extending benefits under the PMAY and redefining affordable housing to include properties up to Rs. 1 crore in metro cities. Addressing liquidity issues by ensuring easier access to financing and expanding the SWAMIH stress fund is also crucial. Simplifying land acquisition and promoting rental housing policies are essential for urban development. Mr. Sharma believes these measures will revitalize the sector and contribute significantly to economic growth.

Mr. Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Vice President, CREDAI-MCHI:

Mr. Chivukula highlights the importance of increasing tax deductions on home loan interest to stimulate residential demand. He advocates for a single-window clearance system to expedite approvals and incentives for affordable housing, such as extended tax holidays and increased PMAY allocations. Rationalizing GST rates and granting infrastructure status to the real estate sector will facilitate easier access to funding. He emphasizes the need for sustainable development policies and incentives for rental housing to meet urban housing needs. Special provisions for reviving stalled projects are also essential for market stability.

Mr. Vedanshu Kedia, Director, Prescon Group:

Mr. Kedia calls for a rethinking of the GST structure, advocating for input tax credit and rationalization of GST rates to make real estate more affordable. He urges revisions in capital gains taxation, reducing the holding period for long-term gains and increasing exemptions under Sections 54 and 54EC. Enhanced infrastructure development and incentives for NRIs to invest in Indian real estate are also critical. Supporting millennial homebuyers with incentives and focusing on senior living solutions are necessary to address demographic trends. Overall, he seeks policies that enhance transparency, reduce regulatory bottlenecks, and promote sustainable development.

Mr. Samyak Jain, Director, Siddha Group:

Mr. Jain emphasizes the need for tax benefits, easier access to credit, and improved liquidity to sustain the sector’s growth. He advocates for targeted schemes for millennials and first-time homebuyers to boost demand. Increased budgetary allocation for infrastructure development in cities like Mumbai is essential to unlock new development regions. These measures will foster a conducive environment for real estate growth, contributing to overall economic development.

Ms. Shraddha Kedia-Agarwal, Director, Transcon Developers:

Ms. Kedia-Agarwal anticipates policies that stimulate the housing market, such as tax benefits for homebuyers and reduced GST rates. Simplifying FDI processes and making them more attractive to foreign investors is crucial for bringing capital into the sector. She calls for policies that make it easier for NRIs to invest in Indian real estate, alongside substantial budget allocations for infrastructure development. These steps will benefit ancillary industries and create numerous job opportunities, supporting overall economic growth.

Mr. Rohan Khatau, Director, CCI Projects:

Mr. Khatau stresses the importance of enhancing the tax deduction limit on home loan interest and investing in social infrastructure to drive real estate demand. Simplifying FDI norms and promoting sustainable development practices are also key. He advocates for substantial budget allocations for infrastructure improvements, which will open new areas for development and provide more opportunities for both developers and homebuyers.

Mr. Himanshu Jain, VP – Sales, Marketing & CRM, Satellite Developers Private Limited (SDPL):

Mr. Jain highlights the need for continued support for affordable housing initiatives, especially in metro cities. Enhancing tax benefits for homebuyers and increasing budget allocations for infrastructure development are crucial for the sector’s growth. He also calls for reforms and incentives to boost commercial real estate and promote REITs, which will bring in much-needed capital and provide investment opportunities.

In summary, the real estate sector looks forward to a budget that addresses these critical areas, fostering growth and stability while contributing significantly to the nation’s economic recovery and development.

New Delhi: During the recent National Conference organized by ASSOCHAM, focusing on the evolving dynamics of real estate in India’s development journey, Mr. Pradeep Aggarwal, Chairman of the National Council on Real Estate, Housing, and Urban Development at ASSOCHAM, and Founder and Chairman of Signature Global (India) Ltd., joined Mr. Sanjeev Kumar Arora, a distinguished member of the Gurugram Bench of the Haryana Regulatory Authority, alongside other dignitaries.

On this occasion, Mr. Aggarwal, highlighted the critical role of the real estate sector in elevating India to a top global economy.

While discussing the interim budget, he pointed out that it did not have much of significant policy integration but highlighted a notable aspect—the ambitious goal of achieving a developed India by 2047. In a country like India, where infrastructure development is crucial, he emphasized the pivotal role of the housing sector. He stressed that addressing the housing shortage not only fulfills the basic need for shelter but also drives substantial job creation. He also emphasized that achieving a developed India would not only ensure every family has a home but also generate employment opportunities across various sectors. Expressing a strong desire for India to rank among the world’s top economies, he stressed on the importance of collective contributions towards the nation’s prosperity.

Further discussing the economy, he emphasized that we are on the brink of an era of unprecedented change, reflecting the need for a positive outlook towards the Indian real estate market. Currently valued at Rs 24 lakh crore (approximately $300 billion), our real estate sector serves as the backbone of the country’s economy, making substantial contributions to GDP and presenting abundant investment opportunities. With ambitious targets set for the sector to contribute 13.8 percent of GDP by 2034 and 17.5 percent by 2047, the sector is poised to play a pivotal role in India’s journey towards becoming a developed economy.

The demand for residential properties is steadily increasing, boosted by the Government’s robust infrastructure development and investor-friendly policies. He highlighted how significant policy reforms like the Credit-linked Subsidy Scheme under the Pradhan Mantri Awas Yojana, as well as reforms such as RERA and GST, have significantly strengthened investor confidence. These reforms have successfully attracted both global and domestic investors to the sector.

Knight Frank’s Report projects that over the next decade, about 70 million Indian families will move towards home ownership, creating a robust demand for new homes. This surge is expected to contribute up to US$906 billion to the Indian economy.

The upcoming Union Budget 2024- 25 presents promising opportunities to address this demographic shift. Through ASSOCHAM, we intend to advocate these opportunities to the Hon’ble Finance Minister. Key expectations include revival of the Credit Linked Subsidy Scheme in urban areas, to promote affordable housing solutions and alleviate financial pressures on middle-class families by reducing EMIs. By promoting increased homeownership, these efforts will catalyze economic activity across sectors, from construction to consumer goods, thereby advancing India’s journey towards sustainable economic development.

This highlights housing’s crucial role in promoting inclusive growth, improving living standards, and establishing India as a vibrant center for global investment and economic progress.

By – Akash Pharande, Managing Director – Pharande Spaces

The political atmosphere in India has a big impact on the property market, just like it does in other countries – especially during general election seasons. Election cycles have had a discernible impact on the real estate market over the last twelve years. What should end users and investors expect after the forthcoming general elections? Let’s examine the behavior of the Indian housing market before and after the general elections.

Trends Ahead of the Election

In the past, we have seen that the Indian real estate market tends to slow down in the run-up to general elections. This is because buyers and investors become cautious when there is uncertainty surrounding the results of elections and possible changes to policy. Pre-election data usually shows a trend of lower transaction volumes and reduced rate of property price rises.

For example, the market saw a notable decline in sales and new launches during the 2014 general elections. The top seven cities in India had an almost 30% drop in home sales in the quarters preceding the elections. Similar patterns were seen in 2019, with the primary and secondary markets slowing down as aspiring buyers and investors opted to wait and watch.

Recovery Following Election

The housing market usually rebounds markedly after elections. Clarity on government policy and restored consumer confidence are often the driving forces behind this rebound. Following the 2014 elections that resulted in the arrival of a stable government, there was a notable upturn in the market. Positive consumer sentiment and increased investment caused an almost 50% increase in sales in the following months, according to reports.

These patterns were repeated in the 2019 elections. Again, the reviving market momentum was supported by the guarantee of political stability. Another factor at play was that people now had confidence in the Real Estate (Regulation and Development) Act or RERA. By the end of 2019, new investments were flooding the market, not only in the residential space but also in commercial real estate.

Current Market & Future Outlook

This year, the housing market in India has remained resilient even in the period of uncertainty before the general elections. The current government has taken several measures to increase housing demand, infrastructure development, and economic reforms. A general confidence that this government will continue to remain in power has provided considerable protection from the typical pre-election downturn.

After the election, the Indian housing sector has every reason to remain upbeat. The market will definitely rise if the party in power can maintain the policy and safeguard economic stability. There are also industry expectations that the GST applicable on building supplies may be moderated with upcoming regulations. This would prove to be a big shot in the arm for both developers and their customers, as will help keep property price rises in check.

Apart from that, there are expectations that the availability of financing for the housing sector may improve and that affordable housing once again becomes a priority sector for the government. All this will certainly contribute to steadily improving housing market dynamics.

Implications for Investors

The post-election phase will deliver very attractive opportunities for both buyers and investors of residential real estate. Once the government announces more measures to boost the market and stabilize the economy further, real estate will rise and yield very significant returns due to price appreciation and increased demand. Such measures will dovetail very well with the growing trend of digitization and transparency in real estate transactions.