Budget pushes infra growth, PMAY, but leaves homebuyers disappointed

The interim Union Budget 2024-25 allocated Rs 80,671 crore for PMAY, giving a further boost to the government’s programme to provide affordable housing.

While industry experts welcomed the Interim Budget 2024 for its major infrastructure allocation, homebuyers said they felt left behind as the budget did not offer any major relief for them.

Amid high home loan interest rates and rising real estate prices, homebuyers were seeking policy reforms in the budget --- including tax rebates and stringent enforcement of regulatory bodies like the Real Estate Regulatory Authority (RERA) - that would ease the pain of buying a new home.

"The homebuyers were expecting more allocation towards implementation of the Real Estate Regulatory Act (RERA) and relief towards interest on home loans. But it is unfortunate to see no directions from the government in the budget for the middle-class homebuyers of this country," Dhananjaya Padmanabhachar, president of Karnataka Home Buyers Forum told Moneycontrol.

Another Noida-based homebuyer, Rajiva Singh, said increasing the tax rebate on home loan interest rates from Rs 2 lakh to Rs 5 lakh would have benefitted first-time homebuyers who lose the benefit of an interest claim that exceeds Rs 2 lakh.

The present limit for deduction of interest on home loans under Section 24(b) of the IT Act is Rs 2 lakh for self-occupied property or rented property.

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Real estate experts say from a supply perspective, tax breaks such as a reduction in customs duties or GST, would have been beneficial in accelerating new supply. "In the current landscape where demand has surged to a decadal high along with a substantial increase in residential prices, such measures could have played a role in creating a balance and crafting a sustainable long-term growth story," Sudhir Pai, CEO, Magicbricks added.

However, industry experts said that the budget lays commitment to advancing the Housing for All vision with provisions under the PM Awas Yojana and a focus to enhance economic, digital and social infrastructure. These strategic initiatives are poised to generate additional employment opportunities and foster a positive ripple effect on the real estate sector, Pai said.

Boost to PMAY, developers look for post-election budget

The interim Union Budget 2024-25 allocated Rs 80,671 crore for PMAY, giving a further boost to the government’s programme to provide affordable housing.

"Achieving the milestone of 3 crore houses under the rural housing scheme and setting an ambitious target for the next five years reflects a significant investment in infrastructure development that addresses a basic need, that of housing," Sandeep Runwal, president of National Real Estate Development Council (NAREDCO), Maharashtra said.

Developers say an increased focus on transit-oriented development and expansion of metro rail systems in cities, along with strengthening the electric vehicle ecosystem, will encourage people to settle in the peripheries of the urban centres --- thus boosting new real estate pockets across cities.

“Overall, we look forward to the final budget post-elections and are hopeful that the government will announce more policy initiatives to encourage housing for all further - both for buyers and real estate developers,” Ashish Puravankara, Managing Director, Puravankara Limited added.