Realtors body NAREDCO on Tuesday demanded that the new government should bring policy reforms for growth in real estate sector and provide tax incentives to home buyers as well as developers to boost housing demand.
The association also sought streamlining of getting approvals to develop projects.
Reacting on the results of the Lok Sabha elections 2024, NAREDCO National President G Hari Babu said, "The real estate sector is at a crucial point, with great growth potential but significant challenges. To reach a market size of USD 1 trillion by 2030 and become a net-zero carbon industry by 2047, we need government support." Addressing rising home loan EMIs, implementing key policy reforms, and introducing sustainability incentives are essential, he said.
Additionally, making affordable housing more accessible by adjusting financial limits and providing incentives for builders is critical for the progress, Babu said.
"We are seeking specific actions from the government to address the rising home loan EMIs and interest rates. The increase from 6.25 per cent before COVID-19 to around 8.75 per cent today has made monthly EMIs very expensive, particularly for middle-class families. We urge the government to provide relief by offering lower interest rates for affordable housing loans.
"This can be achieved by setting the first Rs 20 lakh or Rs 25 lakh of a home loan at a 5 per cent interest rate for the first five years," the NAREDCO President said.
Babu said specific policy reforms are necessary to stimulate growth in the real estate sector, particularly in affordable housing.
"We expect the government to implement policy reforms and incentives to support the growth and sustainability of the real estate sector. These reforms could include financial incentives for sustainable building practices and subsidies or tax breaks for developers who focus on affordable housing projects," he said.
Babu felt that easing regulatory constraints and streamlining approval processes would further boost the sector's growth.
Anarock Chairman Anuj Puri said, "A stable government with a strong focus on development and increased expenditure to build assets reinforces the confidence of global investors who are hoping for a wider spread of options in India. Simultaneously, a strong opposition is always supportive of a vibrant democracy." Samir Jasuja, CEO and MD of real estate data firm PropEquity, pointed out that real estate prices have surged in recent years, nearly doubling in the last four years.
On the contrary, he said, tax deductions offered on home loans haven't kept pace. In effect, the benefit of these deductions has been halved taking into account the rising property values.
"In order to achieve the government objective of USD 1 trillion real estate industry, reforms are needed to incentivise both buyers and investors," Jasuja added.
Pradeep Aggarwal, Founder & Chairman, Signature Global (India), said the infrastructure sector along with the real estate sector is key for achieving the goal of 'Vikshit Bharat'.
"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," he said.
Aggarwal hoped that the new government will extend the income tax benefits on home loans in the new income tax regulations as well.
"We also expect the new government to address some of the challenges faced by these sectors and take the lead in convincing the GST Council to ease the burden of Goods and Services Tax (GST) on both developers and consumers," he said.
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