No major announcement for the real estate sector, expectations from the budget remained unfulfilled
02-Feb-2024
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Budget 2024: The real estate sector was hopeful that they might get some big support from the government in the interim budget coming before the elections. But Finance Minister Nirmala Sitharaman kept this interim budget limited and avoided making big promises before the elections. The real estate sector has also not got anything special from this scheme. The sector's expectations from the budget remain unfulfilled. However, the Finance Minister made some announcements which will maintain the momentum of the real estate sector.
Real estate sector will grow even in small cities
Enrock Group Chairman Anuj Puri said that as per estimates, no major announcement was made in the interim Budget 2024. But, in the budget there has been talk of focusing on infrastructure and connectivity. This will lead to real estate development in big cities as well as Tier 2 and Tier 3 cities.
These announcements of the Finance Minister will be beneficial
The target of 3 crore houses was achieved in PM Awas Yojana (Rural). 2 crore more houses will be built in the next 5 years.
The government will start a scheme to help middle class people living in rented houses, slums, chawls and illegal colonies to buy or build houses.
Capital expenditure for infrastructure will be increased by 11.1 percent to Rs 11,11,111 lakh crore, which will be 3.4 percent of GDP. This will open the possibility of real estate development.
Transit oriented development will increase the demand for houses in cities. Also, prices may increase. It will be beneficial in Tier 2 and Tier 3 cities also.
The development of tourist centers will increase the demand for hotels and restaurants. Long term loans will be given to states to increase tourism.
Extending the tax benefit to startups for one more year may increase the demand for offices.
The hope of real estate sector remained unfulfilled here
The real estate sector has been demanding to be declared an industry for years. With this one can easily avail the benefits of loan and tax exemption. But, there was disappointment on this issue in the interim budget.
Tax benefits are also not available for home buyers. If tax exemption on home loans had increased, the real estate sector would have benefited greatly.
If the budget for PM Awas Yojana (Urban) increases, the demand in the real estate sector will increase. But, no such announcement was made in the interim budget.
The interim budget has ignored the demand of the real estate sector. Now the entire hope of the sector is pinned on the full budget coming in July.
There is disappointment among home buyers due to no announcement regarding tax exemption on home loan interest.
Good impact of budget will be visible in equity market
Navneet Munot, MD and CEO of HDFC Asset Management Company Limited, said that the budget has talked about the poor, youth, Annadata and women. Despite global challenges, the condition of the economy remains good. By providing adequate money for infrastructure, the Finance Minister has given full opportunity to the economy to move forward. A good impact of the budget will be visible in the equity market.
