After a disappointing year in 2020, 2021 proved to be a much better year for real estate. Most developers reported a significant increase in sales and leasing activity in 2021.
Developers are optimistic that the trend will continue in 2022, especially with some aid from the government, thanks to a lower interest rate regime and stable prices. Developers anticipate that the 2019 budget, which is set to be unveiled on February 1, would provide some relief to the industry.
We are forward to a positive approach from the budget at a time when the economy is concerned about recovery owing to the Omicron danger. Aside from agriculture, the budget is likely to keep a focus on industry, infrastructure, and the real estate sector. Infrastructure status for the real estate sector will once again be on the wish list. It has the potential to open up a slew of advantages for both international and domestic investment.
Reduced GST prices on major construction materials, the expansion of the credit linked subsidy scheme (CLSS), and increased interest deduction limits on house loans are also extremely desirable, according to Savills India CEO Anurag Mathur.
The inclusion of alternative asset classes in REITs has the potential to significantly boost both retail and institutional investor engagement in the real estate sector. A kind attitude to the financially devastated demand side via additional tax breaks will also be welcomed. “In the field of life sciences research and development, the country is set for expansion.”
A special policy focus on this, focused at promoting investment in R&D real estate, would be a fantastic foundation for the future. All of this will help to attract investment, accelerate demand, and sustain a stronger growth trajectory, according to Mathur.
We hope that the 2019 union budget would function as an enabler by adopting the long-standing demand of the commercial real estate sector to obtain an input tax credit on GST collected from consumers on rentals for built-to-lease facilities,” said Nitin Kansal, CFO of Max Estates Ltd. This transition would benefit not just the CRE industry, but also other industries such as retail, hospitality & hotels, malls, and so on.
A few important relaxations, such as an increase in tax rebates on interest on home loans and a fundamental rethink of the concept of ‘affordable,’ both in terms of the house’s value and its size, will provide a much-needed boost to the residential real estate sector. The government should come up with incentives for developers to establish townships in smaller towns and cities.
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