Sunday, July 14, 2024

Union Budget 2024 – What is Real Estate Sector Expecting and its impact

The Indian real estate market witnessed unprecedented growth in 2023, surpassing all expectations and setting new records. As the market gears up for 2024, all indicators point to a sustained and robust growth phase, bolstering the nation’s economy and investor confidence alike. 

The upcoming Union Budget 2024 sets the expectations high for the real estate sector. The developer community expresses its wish list for the government to look into it. 

Pradeep Aggarwal, Founder, and Chairman, of Signature Global (India) Ltd. says, “Our foremost expectation is the long-overdue grant of Industry status to the Real Estate sector. This recognition will not only catalyze investments but also streamline regulations, fostering a more conducive environment for sustainable development. Furthermore, we urge the government to extend the benefits of Infrastructure status to the affordable housing segment, a move that will significantly boost the sector’s affordability and accessibility, aligning with the nation’s vision of ‘Housing for All.”

He further adds, “To alleviate cost burdens, we advocate for a reduction in GST rates on construction materials to the single digit, fostering affordability without compromising on quality. In pursuit of efficiency, we implore the government to institute a Single Window Clearance system, expediting approvals and sanctions.” 

Despite global economic uncertainties, the sector has shown remarkable resilience and is expected to foster growth through favorable government policies.

S K Narvar, Group Chairman, Trident Realty is optimistic that the upcoming Union Budget will bring impactful measures to accelerate growth momentum. 

He 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. Another key area for the government to consider 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. Furthermore, 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 commercial realty segment comprising office space and retail space is a key driver in the sector’s growth graph. Known for its resilience and adaptability, the real estate sector hopes for strategic policy interventions to ensure its continued growth and development.

On the factors and policies to push commercial segment growth, Aman Trehan, Executive Director, Trehan Iris 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. The single window mechanism is also a significant concern for the sector, and the government should address it in the upcoming budget.”

He further adds “To promote growth in the office space segment, start-ups, MSMEs, and entrepreneurship need to be supported. The budget should continue to emphasize measures to encourage consumer spending and investment to strengthen the retail space segment.”

The real estate sector is looking forward to the upcoming budget announcement, hoping that it will include measures that can support growth and propel growth in the nation’s economy. 

Venket Rao, an RERA Expert & Founder, of Intygrat (A corporate Law Firm) says “The government’s interventions in the real estate sector not only have a financial impact on home buying but also serve as a reinforcement of regulatory frameworks. Over the years, the real estate industry has seen some important regulatory changes that have not only addressed various violations but have also fostered trust in the real estate business, which has been steadily rising in recent years. The sector wishes for measures to stimulate demand to strengthen its pivotal role in India’s economic landscape. The sector firmly believes that the budget will provide the necessary impetus for its continued growth and development. The real estate sector recognizes the importance of intensified execution of the amendments to further elevate transparency and ensure the industry’s integrity. The government’s support in this regard is crucial. With government interventions and regulations, the sector aims to shield itself from fraud and delays, ultimately contributing to a more robust and trustworthy real estate market.”

The government should take proactive steps to promote growth by simplifying clearances, providing fiscal incentives, granting industry status, and more.

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