Budget 2024 | Incentives to buyers, tweaks to definitions of affordable housing top real estate sector’s wish list

Pritam Chivukula, co-founder and Director of Tridhaatu Realty and vice president of CREDAI-MCHI agrees. "Such measures are expected to lower property rates and stimulate demand. With property prices in metro cities skyrocketing, the industry advocates for a revision of the cap in the credit link subsidy scheme. Raising the limit from ₹45 lakh to ₹1 crore for metro city home buyers will significantly benefit the affordable housing segment, making homes more accessible," he says.

Chivukula is also an advocate of expanding the Special Window for Affordable and Mid-Income Housing (SWAMIH) Investment Fund, which was formed specifically to aid in the completion of stressed and stalled residential projects. "This will not only assist developers but also reinforce homebuyer confidence by delivering projects on schedule," he argues.

The real estate sector’s revival over the last couple of years has not been restricted to the metros; even smaller Tier-2 and Tier-3 cities have seen a significant uptick in property deal volumes and deal values. This momentum, developers say, cannot be allowed to falter. As SK Narvar, Group Chairman, Trident Realty puts it, measures are needed to both create fresh demand and encourage more developer interest. "Government can consider providing more infra-development funds to ensure that a larger number of projects in these cities benefit. Furthermore, the government should consider revising the definition of affordable housing, both in terms of value and size, to cater to a large population that has returned to their hometown and to boost housing demand in new markets," he says.

Developers also point to a new trend that has taken root: an increasing propensity for non-resident Indians (NRIs) to buy property in India. Aakash Patel, Director at Atul Projects India says, "The residential real estate market in India has become increasingly appealing to NRIs, thanks to improved transparency from the Real Estate Regulation and Development Act (RERA) and relaxed investment norms,” he says, and add that incentives like easier tax compliance and reduced withholding tax rates would go a long way in not just generating more interest but closing bigger deals faster.

Players are also keen that burgeoning investor interest in commercial real estate as a category cannot be ignored, and should not be allowed to flag. ”The global rise of Real Estate Investment Trusts (REITs), along with India's burgeoning REIT market, indicates a bright future for the nation's commercial real estate sector. The government's efforts to enhance liquidity and bolster investor confidence in REITs are eagerly anticipated," Patel says.

Then there is the argument for granting the sector infrastructure status, which will bring with it automatic supportive measures. Pradeep Aggarwal, founder and Chairman of Signature Global says, "This recognition will not only catalyse investments but also streamline regulations, fostering a more conducive environment for sustainable development. Furthermore, we urge the government to extend the benefits of Infrastructure status to the affordable housing segment, a move that will significantly boost the sector's affordability and accessibility."

He argues that in addition to infrastructure status, efforts to cut down on red tape when it comes to starting and constructing new projects will also help increase supplies, which will in turn mean home buyers do not have to worry about high prices. He says, “In pursuit of efficiency, we implore the government to institute a Single Window Clearance system, expediting approvals and sanctions. This streamlined process will mitigate bureaucratic hurdles, paving the way for expeditious project execution."

Last, but by no means the least, is a call for easier access to cheaper funds for the industry. Cultivating a more congenial funding ecosystem for the real estate industry, experts and players say, has to go hand in hand with the other incentives and simplified processes if the end result of a stronger, more vibrant, and high-growth real estate sector is to be meaningful. This also has to dovetail with measures to strengthen allied ecosystems and industries -- on both the supply and demand side – especially when it comes to commercial real estate.

Aman Trehan, executive director at Trehan Iris says, "To promote growth in the office space segment, start-ups, MSMEs, and entrepreneurship need to be supported. The budget should continue to emphasize measures to encourage consumer spending and investment to strengthen the retail space segment."