The Real Estate industry of India was in a lull for last the couple of years or more with the pile of unsold stock increasing and the industry was struggling to get the buyer’s attention for products which were highly priced. The buyer’s enquiries poured in plenty but the conversion rate was very low. The Realtors only hoped for a better time and few market condition improvement or probably an interest rate cut hoping a revival in the faith of the buyers in the market conditions.
Although there was a recent interest rate cut by the RBI of 0.25 percent which the banks are trying to implement by lowering the interest rates but the realtors are not happy with it as the demands are more for the compensation of the business loss due to the bad condition of the market. The wish list of the realtors is almost the same with expectations of improvement of few of the common issues plaguing the industry. Moreover the expectations of the real Estate industry is high not only for the reason that the industry has a justifiable share in the country’s GDP but the central government’s measures seem to be in tune with the vision and aspirations of the industry as well like “100 smart cities” and “Housing for all by 2022”. With the central government budget scheduled at the end of this month the whole of real estate industry expectantly awaits the budget session with a lot of hopes and aspirations. Let’s discuss these issues in detail.
Faster project Approvals:
The developers were campaigning for a long time for speedier project approvals for the good of all. In many cities like Mumbai and others approvals are not only delayed but they inflate the cost of construction by 40 percent, according to an estimate. Thus speedier approvals will boost the supply of housing and real estate products and also propel the business conditions on the positive by helping to bring the prices down. They hope that the budget should bring some relief on this front without making any room for compromise in quality of the project and it shouldn’t either fail in providing support infrastructure in the new areas that’s being developed.
Practical impetus for affordable housing.
The central government had promised a lot in promoting affordable housing and detailed its vision for the same in the past nine months. The Indian Real Estate Sector expects the government to provide provisions that back their vision in the policies and financial strategies in the next 12 months to come.
The Rental Housing segment should be boosted by providing tax benefits and incentives.
At present rental income is considered as taxable like other sources of income which if given certain incentives and exemptions can boost the rental housing segment to a considerable extent propelling demand and facilitating increase in supply in the urban areas.
Implementation Of The Real Estate Regulatory Bill (RERA).
The Real Estate Regulatory Bill which is an attempted statute in bringing regulations to check the end users and buyers from being exploited is being postponed and the realtors expect a speedy redressal of the issue so that it becomes attractive for the foreign buyers and NRIs as well. The realtors feel that the central government should put an end to the suspense of the realtors by making this much required policy a reality.
Encouragement of Foreign Direct Investment (FDI) in Infrastructural Development.
India needs huge infrastructural development which it is deficient in, to help foster progress and bridge the infrastructural gap in planning and development. The realtors expect more provisions to welcome foreign investors in this sector.
Real Estate Investment Trusts (REITs) to be promoted on faster track.
The foreign investment funds abstained from the Indian real estate market because of the lack of regulation, bureaucratic red tapes and political instability in the country. It is expected from the new government to make policies which are more investment friendly and adopt measures to attract more investment introducing a more investment friendly tax structure. REITs if introduced in India can be a panacea for the real estate industry as well as for the economy. The budget is expected to address this issue.
Land Acquisition Rehabilitation and Resettlement Act. should be relaxed with more productive clauses.
The Land Acquisition Rehabilitation and Resettlement Act. has been amended and reformulated so many times but has failed to counter the land related bureaucracy in India and has rather done the opposite. The real estate sector is desperate to ease the land settlement as the sector needs lot of land which is required for development and infrastructure improvement too. With the declaration of construction of 100 smart cities and housing for all, the union budget is expected to streamline the LARR Act. with relaxations in the rehabilitation clauses and other factors.
More incentives for boosting Sustainable Real Estate.
The ensuing budget should present a clear cut benefit statement regarding the consumers of green real estate in the country. The stakeholders of the residential real estate sector of India definitely requires greater encouragement to go green as most of the realtors and residents are adverse to paying extra premium for a green residential project and developers are also not so active in this segment because of the low demand. The union budget is expected to address this drawback by declaring few state level subsidies for more development of greener spaces so that the developers can also keep their costs in control.
A further interest rate cut.
The realtors feel that a recent cut in the interest rate is certainly a good move but the industry needs more slashing of interest rates. A flow of liquidity should be ensured to ease the situation which makes the cost of funding for both the buyer and the builder lower than what it is today. The realtors feel that if the RBI does not take steps in this regard the central government should make provisions for the flow of liquidity to the realty segment.
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