Budget 2018 balanced for Affordable Housing, No direct impact on Realty

0
177
Real estate

The real estate sector sees Union Budget 2018 as a balanced one with focus on affordable housing; but, not having any direct impact on the sector.

As Anuj Puri, Chairman of Anarock Property Consultants, maintain: “Budget 2018-19 was balanced but Not a Boon for Real Estate.”

Little Direct Impact

According to Joe Verghese, Managing Director of Colliers International India, the Budget seems to be heading to have minimal direct impact on the Real Estate industry. This comes as a significant departure from the last three years.

Shishir Baijal, Chairman and Managing Director, Knight Frank India, was more forthcoming. According to him, there has been a silence in the budget on stimulating mainstream real estate demand.

“The sector grappling with the reforms-driven new order has been bereft of any meaningful interventions that could have been achieved through the budget,” he pointed out.

In fact, Ramesh Nair, CEO and Country Head, JLL India, pointed out that no changes in Income Tax slabs or other direct measures that influence the sector were announced. Hence, the demand and supply dynamics of real estate sector get no further intervention.

“The sector was reeling for a while; and was expecting some big ticket announcements to revive it. This was from the perspective that real estate greatly contributes to the three economy (by contributing 7.7 per cent to GVA), employment (15 million job creation over 5 years) and exchequer,” he said.

Affordable Housing

However, some strengthening in affordable housing is expected to be witnessed.

As Santosh Rungta, former President of builders’ body, CREDAI, points out, there has been a continued push on affordable housing the setting up of an affordable housing fund is proof of that.

“The establishment of a dedicated affordable housing fund under the National Housing Bank for priority sector lending will provide a further impetus to the development of housing in this segment,” he said.

Union Finance Minister, Arun Jaitley, has announced the setting up of a dedicated Affordable Housing Fund (AHF) in National Housing Bank. It will be funded from priority sector lending shortfall and fully serviced bonds authorized by the Centre.

“Affordable housing looks like a good bet now. And in fact, the continued focus on smart city projects is expected to boost real estate activities further,” Rishi Jain, Director, Jain Developers said.

In fact, Ashish Jindal, Co-Head, Real Estate, Sanctum Wealth Management, is hopeful that this fund will help a few major real estate companies delve into the affordable housing segment as a viable business opportunity.

“The Budget has given a big relief by allowing upto a 5 per cent gap between the two and this has the potential to remove the irritant and revive secondary market transactions,” he said adding that the move may also help increase demand for housing.

Post demonetisation, the secondary market witnessed a bit of turbulence due to the absence of liquidity. Additionally, in major cities, the circle rates were increased and had become more than the market rates. This resulted in a gap between the two rates, which was counted as income in hands of both buyer and seller.

​Rural Thrust

Another positive is the clear focus on pushing up farmers’ income thereby kick starting consumption in the economy.

According to Harshavardhan Neotia, Chairman, Ambuja Neotia Group and former President of FICCI, the budget lays a clear focus on increasing farmers’ income. This will boost consumption; which in return gives a fillip to the real estate sector.

“Real estate is a function of multiple parameters and bearing of the overall economy. So if there is an overall boost to the economy through farm spending and so on; then we will see a rub-off effect on the real estate sector,” he toldBusinessLine.

Comments

comments

Get More Of Real Estate

Subscribe to our mailing list and get interesting real estate stuff updates to your email inbox.

Thank you for subscribing.

Something went wrong.

Latest Price Performance of Indian Real Estate Companies Stocks

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Comment moderation is enabled. Your comment may take some time to appear.