The atmosphere prevailing on the eve of Union Budget 2024-25 could once again described in two words – great expectations – and Nirmala Sitharaman, Union Minister of Finance and Corporate Affairs didn’t disappoint. The eagerly anticipated announcements provided plenty of reasons to cheer though of course, there was always a pending wish list with items that many felt should have been addressed. Office bearers of leading real estate associations shared their views and concurred that they expect a number of positive developments that will drive future growth as a result.
National Real Estate Development Council (NAREDCO) welcomed the Union Budget 2024, applauding its comprehensive approach to stimulating the real estate sector and overall economic growth. G Hari Babu, National President of NAREDCO, stated, "The allocation of `10 lakh crore for the PMAY Urban Scheme, targeting 3 crore houses, is a game-changer for the real estate sector. This substantial investment, coupled with the emphasis on rental housing and industrial parks, will significantly boost urban development and create numerous opportunities for our industry. The removal of the indexation benefit for property sales will have a considerable impact on the sector. However, the reduction of LTCG tax from 20% to 12.5% is a positive step. The budget's provision for interest subsidies to facilitate affordable loans, and its focus on transit-oriented development for 14 large cities, will make housing more accessible and affordable, fostering a more balanced and sustainable housing market.”
Dr. Niranjan Hiranandani, Chairman, NAREDCO, commented, "The budget's strategic focus on skilling through private sector internships and CSR-funded training is commendable. This initiative will enhance youth employability and drive economic growth. Furthermore, the `11.11 lakh crore Capex allocation for infrastructure development will have a multiplier effect on the real estate sector. We appreciate the government's holistic approach to sustainable development, including initiatives for solar and renewable energy, water management, and solid waste management. These align well with the industry's goal of climate-resilient real estate development."
Rajan Bandelkar, Vice Chairman of NAREDCO, added, "We are particularly encouraged by the innovative measures such as digitization of land records and GIS mapping. These initiatives, combined with the focus on middle-class urban housing and workforce skilling, will undoubtedly contribute to the sector's double-digit growth. The reduction in the holding period for long-term capital gains to 24 months will also boost investment in real estate."
Prashant Sharma, President, NAREDCO Maharashtra, said, "We commend the Union Budget 2024-25 for its comprehensive approach towards job creation and boosting consumption, which are positive developments for the real estate sector. The Finance Minister's announcement of a PM Package with five schemes focused on employment and skilling, with an allocation of Rs 2 lakh crore, and a significant provision of Rs 1.48 lakh crore for education, employment, and skilling, is a welcome move. These initiatives will undoubtedly create a ripple effect, enhancing the economic landscape and increasing demand for residential and commercial properties. The proposal to encourage states to moderate high stamp duty rates and consider further reductions for properties purchased by women is a progressive measure. Incorporating these as essential components of urban development schemes will promote greater inclusivity and accessibility in the housing market. The proposed rationalization of the tax structure, coupled with the new tax regime changes, including the increased standard deduction, will further benefit the salaried class and boost disposable income, positively impacting housing demand.”
Pritam Chivukula, Vice President, CREDAI-MCHI, opined, “The FM stated that stamp duty for women buying a house has been lowered. This will encourage women to come forward and empower them in the home buying process.”
Jitendra Mehta, President, CREDAI-MCHI Thane, emphasised, “With ‘Viksit Bharat’ in mind, the FM spoke of urban development and infrastructure as being among the key focus areas of the government. Thane’s real estate looks forward to the proposals leading to more home seekers being able to buy their dream home and make it a reality. The FM stressed on enhanced spend on infrastructure, focus on job creation and rejuvenating the MSME sector. She also mentioned positive measures related to Income tax, these initiatives will enhance economic growth and increase demand for real estate. From an industry perspective, the announcement about working with the states on a slew of land related reforms, which covers land administration, planning and urban planning and building bye-laws will be a positive. Assignment a unique Aadhaar for all lands, digitisation of terrestrial maps, survey of lands, and establishment of land registry, with land records in urban areas to be digitised will positively impact real estate.”
“The focus on enhancing urban infrastructure is ‘in sync’ the real estate sector's goal to promoting balanced regional development while also addressing the challenge of urban migration. “The industry expectation is that projected economic growth and improvement in consumer confidence will positively impact the housing market by encouraging larger numbers of homebuyers to buy their dream homes. I am optimistic that the Budget will result in robust and resilient real estate,” he added.
While the Union Budget 2024-25 announcements have given considerable cause for cheer, home buyers are now looking forward to how they impact real estate, particularly housing, going forward. Let’s wait and see how far the ripple effect goes.
