New Delhi: For the country’s real estate sector, the only highpoint in the Union Budget 2018-19 was possibly the announcement of a dedicated fund for affordable housing segment under the National Housing Bank. Otherwise, most of the stakeholders of the sector unanimously admitted that the Union Budget 2018-19 did not have any direct impact on the real estate sector, which has been reeling for a while and was expecting some big ticket announcements to revive it.
There have been no changes in income tax sops or other direct measures that influence the sector. On the positive side has been the establishment of a fund for affordable housing, creation of housing in the rural areas under the Housing for All by 2022 initiative and focus on developing 10 iconic tourist destinations. However, from a tax perspective, the sector did not receive any benefits albeit a minor relief in the form of a 5 per cent range where real estate transactions are undertaken below stamp duty value. Additionally a 10 per cent tax has been levied on long term capital gains in excess of Rs 1 lakh on sale of listed equity shares and units of a REIT.
“We see some streng-thening of the affordable housing sector in the form of creation of Affordable Housing Fund under the National Housing Board. This will allow better access to capital related developments in urban and semi – urban areas. Announcements in allocation in infrastructure and road and highway developments of over 9000 kilometers, airport development to increase capacity by 5 times as well as 600 railway station development will create opportunities for developments around these locations. Further government’s focus on the ‘Bharatmala’ to develop 60,000 kilometers further allows for development of new locations,” said Ramesh Nair, CEO & Country Head, JLL India.
Anshul Jain, country head & managing director, India, Cushman & Wakefield, said, “We believe that the fund will provide ease of credit to homebuyers, thereby giving a much-needed boost to demand for low-cost homes across the country. We expect the resultant increase in home loans to give a huge impetus to developers to take up affordable housing projects, and aid supply in the affordable segment that has remained largely under-penetrated till now, despite immense pent-up dem-and. This is in line with our prediction for 2018 that affordable housing will drive residential sector, and its share in new residential launches will rise from 46 per cent in 2017.”
Besides the dedicated affordable housing fund, the fact that differentials between market value and circle rates for properties (upto 5 per cent) will not be adjusted, will also help the demand for housing, felt Anshuman Magazine, chairman, India and South East Asia, CBRE. While admitting that the Centre’s focus has predominantly been on revitalizing rural economy, rural housing, affordable housing through various measures, Shishir Baijal, chairman & managing Director, Knight Frank India, however, pointed out that there had been a silence in the budget on stimulating mainstream real estate demand. The sector gra-ppling with the reforms-driven new order has been bereft of any meaningful interventions that could have been achieved through the budget.
