Ailing real estate sector will pick up pace, say experts
Gera Developments Private Limited Managing Director Rohit Gera said the budget speech by the Finance Minister finally demonstrates the intent of the government to support the real estate sector.
PUNE: Experts from the real estate sector said the interim Union Budget will provide relief to the ailing real estate sector and might boost sales in the long run.
They said the tax sops offered to the working class will boost investments. The government announced exemption on notional rent which is likely to attract more investors to the home market. Gera Developments Private Limited Managing Director Rohit Gera said the budget speech by the Finance Minister finally demonstrates the intent of the government to support the real estate sector.
“The extension of Section 80I B for one year is a welcome step. This will boost the continued production of affordable housing. Permitting two homes to be purchased out of capital gain is most welcome,” Gera said.
“An increase in the TDS threshold and removal of notional rent on a second self-occupied home are also positive moves for consumers. For developers, the extension of notional rent by one year is welcome. Hopefully, the boost will help consume unsold stock. The clear indication by the Finance Minister on GST reduction for housing will be the next and final boost for the real estate sector,” Gera added.
CREDAI Pune Metro President Shrikant Paranjape said although the focus of budget was on agriculture and middle class, some provisions will benefit the real estate sector.
“This budget encourages buying second home and exemption of tax from rent earned from the second home. Moreover, rentals up to Rs 20,000 will not require TDS. This is likely to boost the sale of affordable/ budget homes. These steps will encourage the middle class for home buying. Real estate being one of the important contributors to GDP, boost to housing will benefit the overall economy.”
CREDAI National President Satish Magar said some decision about the embargo on sale of flats at rates lower than ready reckoner was expected. “However, nothing came through, which is disappointing. However, certain provisions for housing are likely to help real estate. Change in tax slabs is a big relief for the middle class,” added Magar.
Anarock Property Consultants Chairman Anuj Puri said people earning up to Rs 5 lakh will get a full tax rebate.
“However, if one invests in specified government saving schemes then the tax exemption extends to Rs 6.5 lakh. This can have good implications for affordable housing, but not really on the mid-income housing. There were promises of reduction on GST burden on home buyers, but no announcement of actual relief was made. To bail itself out from the issue of job creation deficit, this budget could have given a decisive impetus to real estate sector, one of the largest creators of jobs. Alternately, it could have created a stress-asset fund to bail out distressed home buyers,” added Puri.