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Real Estate Expectations: What Does the Industry Anticipate from the New Government Term?

Industry reports mention that the implementation of national policies has instilled a great deal of confidence in the realty sector in the previous term.

By Newsd
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Real Estate Expectations

Real Estate Expectations: After the Lok Sabha elections on June 4, 2024, the NDA will form the government for the third time in a row, and the prime minister will be sworn in early next week. Prime Minister Narendra Modi said in his speech yesterday that the country would be writing a chapter of big decisions in its third term.

Industry reports mention that the implementation of national policies has instilled a great deal of confidence in the realty sector in the previous term. In the last decade, a sense of confidence has been instilled among various real estate stakeholders due to RERA and GST implementation, national policies related to logistic parks and data centers, and the overall infrastructure push through the National Infrastructure Pipeline and Gati Shakti National Master Plan.

To drive equitable public and private investment, these long-term measures to balance growth while maintaining fiscal discipline will be crucial.

By 2030, the real estate sector will contribute 13-15% of the nation’s GDP, so a progressive and economically viable vision is essential,” said Badal Yagnik, CEO of Colliers India.

The government has a lot of expectations from the real estate sector, which is the second largest employment generator in India after agriculture.

“The recent election result instills confidence, with expectations of sustained continuity in policy and measures to boost economic stability,” said Sunil Sisodiya, founder of Geetanjali Homestate.

Developers and homebuyers alike can expect a brighter future with upcoming reforms, including possible adjustments to GST.”

Tax benefits

“The return of an existing government to power positively impacts the Indian economy and real estate market,” said Amit Goyal, managing director of India Sotheby’s International Realty.

Our young country is poised to become the third largest global economy by 2027, and demand for homes is likely to remain high.

For several of the measures brought in by the BJP-led government to be effective in spirit, they need much more fine-tuning. To encourage wider home ownership, NDA 3.0 will present the Union Budget soon, which is a good opportunity to relook at the GST burden on under-construction homes and raise taxes on home loans.”

Both infrastructure and real estate are crucial to the achievement of ‘Vikshit Bharat’, which is part of the government’s third mandate.

“We are confident that the new government will continue its focus on both infrastructure development beyond metro and large cities and on the real estate sector, as they have a multiplier effect on the economy.

We hope the new government will extend the income tax benefits on home loans in the new income tax regulations, since the real estate sector has experienced good growth in recent years.

Additionally, we expect the new government to address some of the challenges faced by these sectors and to take the lead in convincing the GST Council to ease the burden of Goods and Services Tax (GST) on consumers and developers,” said Pradeep Aggarwal, founder and chairman of Signature Global (India).

Regarding tax benefits, Samir Jasuja, CEO and MD of PropEquity, said, “Real estate prices have surged in recent years, nearly doubling in the last four years. Tax deductions on home loans haven’t kept pace. As a result of the rising property values, the benefit of these deductions has been halved. To achieve the government’s goal of a $1 trillion real estate industry,

After the Lok Sabha elections on June 4, 2024, the NDA will form the government for the third time in a row reforms are required to motivate both buyers and investors alike.

It could be significant to reintroduce tax benefits that were once available. Restoring such benefits would encourage investment and boost overall property purchases. For example, landlords could deduct the entire rental income against the mortgage interest. As a result, homeowners will be benefited greatly.”

Status of affordable housing and the industry

In spite of its importance, affordable housing has seen slower progress. In Q1 2024, affordable housing accounted for just 20% of total home sales, a decline from previous years.

The importance of revitalizing this segment is highlighted by the need to align it with the healthy growth of the middle and high-end sectors. As approximately 70% of our workforce is unskilled, enhanced training and education are urgently needed.

Chandresh Vithalani, Partner, Palladian Partners Advisory, stated that developing a skilled workforce is crucial to the growth of real estate and the national economy as a whole.

Despite all this, May 2024 has seen a 22% increase in registrations over the previous year, and this trend is expected to continue under the BJP’s leadership.

The BJP’s re-election for a third term, backed by a stronger opposition, underscores the importance of maintaining a balance between democracy and industry. In a future where both democracy and development flourish, all sectors, including the real estate industry, will benefit from a stable government and an effective opposition.

“We have a unique opportunity to harness the potential of our industry and contribute meaningfully to India’s growth trajectory,” Vithalani said.

The segment has been asking for industry status for a long time now. As the stock market is moving northward, especially the BSE Realty Index, which has crossed 8,400, reaching its highest level since 2008, Shrinivas Rao, FRICS, CEO, Vestian, said, “The real estate market sentiment is optimistic.”

Additionally, it has grown by 4-5% in the last five days due to positive expectations from the newly elected government. Our expectation is that the newly elected government will continue to focus on infrastructure development and affordable housing in the coming years. In addition, foreign investors and easier access to funds should be improved for the real estate sector by assigning it industry status.”

Sector-specific investments

For sustained progress, we must promote entrepreneurship and invest in crucial sectors. “Policies foster economic growth, innovation, and a business-friendly environment.

Business expansion and investment require a stable governance environment and a reliable regulatory framework.

Government can drive economic development and generate growth opportunities by prioritizing the needs of the corporate sector,” concluded Suraj Morajkar, MD, Sun Estates Developers.

Also Read: Wall St Week Ahead-Maligned US real estate sector draws buyers eyeing rate cuts

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