Push To Housing Sector Is Good, More Needed: Realty Experts
The new measures announced in the Union Budget 2023-24 may certainly help unleash Indian economy’s potential. However, from a real estate point of view, there were no major direct announcements that could be seen as immediate booster shots, said Anuj Puri, Chairman, ANAROCK Group in his reaction. And he explains the reasons. "Changes in the income tax slabs, including exemption for income up to INR 7 lakh under the new tax regime and the new tax slabs, will doubtlessly benefit the middle class. However, whether the housing sector will get a collateral boost remains to be seen. The new tax regime offers no benefits that taxpayers can avail of under any Sections, including Section 80C - the previous home loan tax benefits," Puri points out.
Puri terms the enhanced allocation for PM Awaas Yojana (PMAY) by 66 per cent to over INR 79,000 crore as a measure that would "certainly boost the affordable housing segment" which was flagging due to increased input costs and also because the buyers in this segment, mostly from the unorganized sector, were still reeling under the impact of the pandemic. "It is another step towards the government's Housing for All mission," he adds. Citing the findings of the ANAROCK Research, 2022, Puri, however, said the affordable housing segment saw a trend reversal with the share of new supply in the category (<INR 40 lakh) dipping to 20 per cent of total 3.58 lakh units launched in top-7 cities from 40 per cent of 2.37 lakh units launched in 2019.
But Pradeep Aggarwal, Founder & Chairman, Signature Global (India) said the budget did touch upon the most critical issue for the revival and growth of the affordable housing segment. "PMAY's budgetary allocation increased by 66 per cent, which is good news for affordable housing. The new allocation of Rs 79,000 crore in the budget 2022-23 will help countless Indians realise their home aspirations," said Aggarwal. Also, the increased allocation will lead to more housing projects being taken up, in both rural and urban areas. The scheme will provide a much-needed boost to the housing sector and continue to assist those from the EWS and LIG sections of society in owning a home, he added. "In order to convert cities from manholes to machine holes, an urban infrastructure development fund of Rs 10,000 crore will be set aside every year for urban development. This fund will help enhance India’s urban living environment besides modernising India's cities and towns,” said Aggarwal.
Ramesh Nair, CEO, India & MD, Market Development, Asia at Colliers, however, maintained that the increase in outlay on PMAY will go a long way in bridging the gap between demand and stock in affordable housing. "This will provide opportunities for associated stakeholders such as construction companies, contractors etc. Further, expected changes in income tax slabs will result in higher disposable incomes, boding well for prospective homebuyers, mainly in the affordable and mid segment," said Nair.
Dhruv Agarwala, Group CEO, Housing.com, PropTiger.com & Makaan.com termed the budget as an inclusive, growth oriented and fiscally prudent budget. "Rationalisation of income tax, especially at the lower end of the income spectrum, would provide extra funds in the hands of middle-class families and alleviate the burden of increasing interest rates. It may also encourage those on the fence to purchase a home, which is the most trusted asset class for Indians. The demand for housing is already very robust, and the Budget 2023-24 would further galvanise growth for India’s real estate sector”," said Agarwala. Also, the increase in overall capital expenditure, the increased outlay for PMAY, the setting up of the Urban Infra Development Fund and the record capital allocation for the railways, will help create better infrastructure and provide a further boost to the real estate sector, he added.
Avneesh Sood, Director, Eros Group termed the hike in funding for the PMAY as a "positive development" in the affordable housing market. "The extension of the Credit Linked Subsidy Scheme (CLSS) will give homebuyers the financial flexibility to make their purchase, thereby helping to achieve the government's goal of completing 80 lakh houses under PMAY. The hike in funding for PM Awas Yojana is a positive development in the affordable housing market and an important step towards creating a more inclusive society," said Sood.
