Real Estate Developers’ Expectations from Budget 2023-24

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New Delhi, January 21, 2023: After the strong recovery the real estate made in 2022, the sector, still grappling with issues such as high input costs and rising interest rates, now pins its hopes on the forthcoming budget to be presented by the finance minister, Smt. Nirmala Sitharaman.

However, despite the prevailing positive sentiments, specific challenges must also be considered. The threat of the pandemic is not entirely over. Decreasing income could also impact the demand in the price-sensitive, affordable segment and the real estate development in tier II and III cities.

“The realty sector has made a smooth transition from the pandemic-induced turbulences. We believe the sector should further be stabilised by introducing profound measures in the Union Budget. Reductions in GST, circle rates, and stamp duty would be significant fresh-start policies allowing the housing sector to gain an upper-hand advantage right at the year’s outset. Besides this, interest rate subsidies should be provided to realtors to cushion the impact of torrid inflation rates and expedite the construction process of stalled projects. Tax waivers on interest paid on home loans are one of the most pressing demands of the realty sector,” says Amit Jain, Director, Mahagun Group.

“The real estate sector is a significant employer of skilled and unskilled labour. Despite facing challenges during the Covid-19 pandemic, the availability of affordable home loans and the desire to own a home continue to drive growth in the sector. The government should support the real estate sector’s growth by granting it “industry status” to allow easier access to financing and low-cost loans. Additionally, reinstating input credit in the GST regime for residential real estate and implementing a single window clearance system for faster project completion would benefit both buyers and developers. To further support homebuyers, the government should consider granting an exemption limit on interest for first-time homebuyers and implementing a principal deduction rule under Section 80C of the income tax code. Alternatively, the limit under Section 80C should be increased to Rs 5 lakhs,” says Dhiraj Bora, Marketing head, Paramount Group.

“The CRE has come out of the pandemic headwinds and projected a strong recovery, with many calling 2023 as the year of the commercial real estate sector with remarkable retail leasing sale growth. The sector expects some incubatory measures to increase the sale velocity and stamp out impeding problems currently plaguing the sector, which include high mortgage rates on home loans. There is also a strong wave in favour of providing industry status to the real estate sector, which would also approbate taking easy loans and financial amenity assurances from banks. An apparatus of single-window clearance should be set up to augment the real estate sector’s growth in the right direction,” says Dushyant Singh, Director, Orion One32.

“The government should align its budget with the goals of the real estate sector and focus on measures that will drive growth. To achieve this, GST rates on construction materials like steel, cement, and tiles should be reviewed and adjusted to support the sector’s health. Additionally, the government should provide assistance to distressed developers and allocate funds for the completion of stalled projects. The Reserve Bank of India’s stance on the repo rate should also take the perspectives of developers into consideration. The budget should aim to be a catalyst for development and progress, removing any obstacles that may impede the growth of the sector,” Harvinder Sikka, Managing Director, Sikka Group.

Corporate Comm India (CCI Newswire)