“Today’s budget has not addressed the core issues that have been affecting the Indian real estate sector. However, enhanced housing loan limit of Rs 25 lakh for priority sector lending is a welcome move. It will definitely benefit a particular segment of home buyers as well as developers”, says, Director General of IDS National Institute of Real Estate Management (NIREM), New Delhi.
The DG further says that this budget also shows that though affordable housing is a concern for the Union Government, it is more concerned with LIG and lower level housing. Few of the most important core issues that have not been touched upon in the budget are:
· Rationalization of stamp duty,
· Introduction of REMFs,
· Industry status to real estate sector,
· Availability of land at concessional rates instead of auctioning at skyrocketing prices
· Introduction of a system of timely master/city development plans,
· Guidelines on private participation in rural housing,
· 80-IB renewal etc.
While industry status brings several advantages to the sector, introduction and promotion of REMFs/REITs enables various funds such as pension funds, insurance companies etc invest in real estate assets which in turn brings liquidity.
Special economic zones under the purview of MAT would reduce the benefits that developer used to get from SEZ. Infact, the additional benefits that SEZ offers had attracted developers but with new policy the level of attraction will reduce to some extent.
On the other hand, DG NIREM further adds, enhanced priority home loan limit of Rs. 2.5 million would do no good to the tight affordable housing situation in bigger cities, though it would definitely benefit the LIG segment in general to some extent. However, interest subversion of 1% on home loan by including loans upto 15 lakh for houses that cost upto Rs 25 lakh for one year will come as a major relief to home loan borrowers from the low income group segment.’’
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