The D-day is here
Still reeling under the monumental weight of Demonetisation, Indian real estate industry is hopeful of a favorable budget from Finance Minister Arun Jaitley on 1st February to turn the table around. Expectations are plenty mixed with apprehensions, questions and speculations.
While all other sectors are getting ready with their wish-lists and expectations are rising, real estate is probably one such industry which is in need of a positive turnaround more than any other industry.
Industry leaders and Stakeholders are putting forward their demands that central government considers relaxation in income tax rate, bring on clarity on GST, raise House Rent Allowance (HRA) deduction etc. A section of industry expert s believe that exemption in income tax slabs will benefit the end users leaving their pocket heavier and that will uplift the sentiment in the real estate sector.
Owing to the demonetization drive many potential buyers especially from middle-income groups decided to postpone their purchase decisions, waiting for corrections in the rates and other factors. Some confidence-boosting announcements from the FM would surely aid the buyers to move forward and take quicker decisions. A few believe that a probable cut in stamp duty along with income tax rate cut for may provide the much-needed boost to the real estate industry.
The silver lining
A part of the industry believes that government is already favoring the real estate industry and trying hard to bring positive changes, the results of which were visible throughout 2016 in form of policy announcements such as introduction of RERA. Post demonetization, major banks like SBI, ICICI, HDFC have cut their lending rates by up to 0.9%. Prime Minister Narendra Modi’s announced reduction in interest rates by 4% on bank loans for property below 9 lacs and 3% less on 12 lacs as per Awas Yojana, on 31st December.
They also believe that the government is seriously pursuing its big vision ‘Housing for all by 2022’; however, there might be a need of reaching out to all target segments rather than only low-cost housing.
Image courtesy: http://www.thehindubusinessline.com/
Real estate industry has been asking for an industry status for long now. With its contribution of roughly 15% of India’s GDP, real estate industry believes that this status is overdue. With the absence of the industry status the developers are obligated to borrow at high interest rates which in turn increase the final price of the properties making it unaffordable for a large section of the buyers. Industry influencers are hoping this demand to be fulfilled in this year’s budget.
For a long time now real estate developers have been demanding single window clearance to reduce red-tape delays. Demands run high on this front as well as the developers are waiting with bated breath to see significant changes in this direction.
With the announcement of the goods and services tax (GST) tax structure, the real estate industry is waiting anxiously to see which tax rate is applied to the real estate and construction industry. Some clarity on this would surely bring relief for the developers and would eventually help the end users as well.
Overall, the industry is optimistic that Union Budget 2017-18 will bring cheers to the common men in the country. With banks cutting rates and the government promoting affordable housing for EWS and LIG categories, with all possibilities, this year’s budget should mark the beginning of smoother and brighter days for real estate industry in India.
Authored by 9amstories.com Editorial