Real estate sector hopes for help to sustain growth

Mumbai: The Indian real estate market has seen a rebound and displayed a lot of resilience post pandemic. Now, to sustain the momentum, the real estate sector is looking forward to the much-needed reforms and incentives in the upcoming budget, especially as the sector is the primary contributor to economic growth.

Even though the government had rolled out certain measures to boost the realty sector, still a lot more needs to be done to catalyse the ailing sector and address both demand and supply side. This year, the demands go beyond the usual expectation of single-window clearance and industry status. The appetite from end-users needs to be rekindled though targeted demand side measures.

Ramani Sastri, Chairman & MD, Sterling Developers says, "Personal tax relief, either by tax rate reductions or amended tax slabs, is the need of the hour, which has been long overdue. To boost the consumption in this sector, the government should focus on providing more liquidity to the tax payer by raising the ceiling of the rebate on the home loan interest."

We also expect input tax GST credit for developers, reduction in stamp duty which has happened in several states and registration charges which make a sizeable difference to the cost of a project, thereby boosting home buyers' sentiment and encouraging them to go in for property purchase, he said.

There is need to redefine 'affordable housing' to Rs 50-60 lakh as this would expand the benefits for homebuyers and therefore boost the end-user demand. The revival of the real estate sector is imperative for the growth of GDP as well as additional employment generation.

Overall, we hope that the government, through its policies will do its best to get the economy to bounce back, and sustain long term growth of the real estate sector too with substantial measures for both the homebuyers and the developers, he added.

Amit Kapur, Joint Managing Partner, J Sagar Associates (JSA) says, "To actualize the ambitious targets set out for investments and employment generation through the National Infrastructure Pipeline, overcoming the challenges posed by Covid I would like the Budget to set out a clear policy track for infrastructure development."

This should create a facilitative environment by effective implementation of the Kelkar Committee recommendations on reviving PPP in particular, establish 3PI to bring robust bid process, fair contractual design and contract management and enforcement.

He also wants to resolve credit risk for payments by state owned enterprises and provide for risks of changing laws (like climate change and environment protection laws, tax laws) and force majeure. Implementing the Specific Relief (Amendment) Act 2018 by establishing special courts for fast-track dispute resolution in PPP projects will be of great help in this direction. Energy transition, he says, has to be nudged through climate change by establishing carbon markets, ancillary services markets which would fund climate transition by pricing the positive externalities of eVs, battery storage and grid stability. Securing cheaper long-term finance for infrastructure assets by relaxing investment restrictions through IRDA, PFRDA, sovereign wealth funds, funding and strengthening the National Bank will help finance Infrastructure & Development, establishing a robust bond market.

More tax sops and higher relief on the home loan rates will woo broader segment of homebuyers and investors to buy property. The existing tax exemption on housing loans should be raised to give impetus to buyer sentiment. There is specific need for income tax relief on a second home which will benefit home buyers in a big way and also stimulate the real estate sector. The budget can also support the industry by ensuring reduction in compliance issues. It should also strengthen the existing financing systems to provide liquidity as developers need a rational capital flow to keep up the work process.

"We are also hoping for GST reforms as this will reduce overall property cost and push demand for homes, granting of industry status to the overall real estate sector and implementation of single window clearance amongst others. We also hope that there will be more announcements to enhance ease of doing business for the developers and are optimistic that the real estate sector is ready for explosive growth in the post pandemic era. These reforms will also be instrumental in attracting investors, institutions and private capital players into India real-estate market. We believe that the government will take appropriate measures to spur consumer demand and give the realty sector a big shot in the arm and affirms robust infrastructure growth. All these measures together will give a big boost to the real estate sector, which in-turn would further intensify revival of the economy going forward," said Lincoln Bennet Rodrigues, Chairman & Founder, The Bennet and Bernard Company, known for luxury holiday homes in Goa.