Real estate industry plays a big role in the growth rate of any country. In a country where this sector faces crisis, the entire economy of that country collapses. The biggest example of this is China, where the ruined real estate sector has put a big stop to the growth of the economy. In case of India this situation is much better. If we look at the sales report of residential property in the country, we will know that a record number of residential flats have been sold in 2023. This is the highest sales record compared to any other year so far. Just as the Indian stock market had traded at a record high last year, a similar situation was seen in the real estate sector as well.
Government policies played a big role
Knight Frank India data shows that India’s top-8 property markets have recorded a 5% growth in annual sales of over 3.29 lakh apartments in 2023. The Mumbai region recorded the highest sales of 86,871 units with a growth of 2%, while Kolkata saw the highest domestic sales growth in percentage terms at 16%, followed by Ahmedabad at 15% and Pune at 13%. increased by.
In terms of 12-month residential price change, Hyderabad saw the highest price fluctuation of 11% in 2023. Mumbai, Bengaluru and Kolkata recorded a growth of 7% each. NCR and Pune saw a growth of 6% and 5% respectively, while Chennai and Ahmedabad saw a growth of 4%. Now the question is whether the government is going to do something in this interim budget, which will play its role in maintaining the good growth of this sector. Let us understand from the experts of this sector what the government should do for better growth.
Need for easy home loan
Hari Babu, Chairman, NAREDCO National, says that real estate in India has witnessed a steady growth over the last few years, which has been driven by factors such as rapid urbanisation, improving infrastructure and growth-oriented government policies that have contributed a lot to the growth. With an estimated economic growth of 7%, India has a solid foundation for the coming financial year. Hari Babu believes that if the government starts easy home loan facility from banks, then it will see more growth in the future. Besides, there is a need to change the charges levied on home loan.
Developers get GST benefits?
Amit Mishra, co-founder of 91Squarefeet, says that the real estate industry stands as a pillar in India’s economic growth, emerging as one of the largest employment generating sectors. The government should consider increasing allocation for infrastructure projects to boost real estate development in urban areas. Additionally, implementing integrated GST solution for real estate developers enabling them to claim input tax credit for all construction materials will not only reduce property prices but also increase transparency in the supply chain. Additionally, there is an urgent need to incentivize financial institutions to create a more favorable financing environment for both real estate developers and contractors. These measures will work to accelerate real estate projects and promote infrastructure development.
Government should pay attention to foreign investors
Gaurav K Singh, Founder and Chairman of Vomeki Group, says that the real estate industry is optimistic and hence we are eagerly waiting for the release of the budget for 2024-2025. We have high expectations from regulations that support housing, promote sustainable growth and create an environment for real estate investors. To empower first-time home buyers, we support reducing capital gains tax for the long term, reduce income tax on second homes and make a strong argument for interest subsidy. Additionally, slight changes in GST on construction materials such as steel and cement may indirectly support the real estate sector by reducing developer input prices and, subsequently, overall building spending.
Aman Trehan, Executive Director, Trehan Iris, says that the realty sector expects that the upcoming Union Budget will provide a favorable policy framework to enhance business operations and attract more foreign investors. For the commercial segment consisting of office space, retail and mall development, the government should provide support. The developer community should direct RBI to reduce interest rates on project financing. Santosh Agarwal, Executive Director & CFO, AlphaCorp, said, “We are looking forward to a Budget where real estate emerges as the cornerstone of progress with policies that promote sustainable growth, encourage innovation and Promote the housing sector with significant tax incentives. Indian real estate industry emerged in a big way in 2023 with many projects, be it residential or commercial. Overall, we are waiting for the Union Budget with provisions for single window clearance system.