Mumbai: The realty industry has welcomed proposals to boost the housing sector, particularly affordable housing and rental housing, proposed in the Union Budget presented by Finance Minister Nirmala Sitharaman on Friday.
"The government's idea to provide affordable housing will be a possibility in almost all the cities - except Mumbai - where there is a paucity of land. I believe that the additional incentive of Rs 1.5 lakh on interest on loans borrowed under the affordable housing would give a boost to the real estate sector further," NAREDCO President Niranjan Hiranandani said.
Tata Realty & Infrastructure Ltd's Managing Director Sanjay Dutt termed the Budget a "mixed bag", but said the availability of lands belonging to the centre for public infrastructure and affordable housing is laudable.
While the reforms in rental laws and the proposed model tenancy law sounds promising, the tax deduction of Rs 3.5 lakhs on loans borrowed up to March 31, 2020 for homes valued upto Rs 45 lakh will bost the government's Housing For All vision, say stake-holders.
LIC Housing Finance Ltd. Managing Director Vinay Sah said the additional deduction of Rs 1.5 lakh on interest on home loans will trigger a strong demand from end-users in the affordable housing category.
Rental housing, which has not made much progress, has a strong potential in urban centres, and the move to bring regulation of Housing Finance Companies under the RBI will ensure consistency of regulatory environment and level playing field for both banks and HFCs, he added.
House of Hiranandani Founder-Director Surendra Hiranandani, welcoming many of the initiatives for the realty sector specially for Tier II and III cities, said that for stimulating growth, the government should impart "industry status" to the building industry.
"This would enable realtors cut capital costs and pass on benefits to consumers. The expected Single Window Clearance is pending, the anticipated reduction in GST to a single standard rate has not come, besides lower interest rates to resolve the liquidity crunch in the sector and boost housing demands," he said.
Sunteck Realty Ltd. Chairman Kamal Khetan said attempts have been made to de-bottleneck issues in the realty sector for the buyers and builders. On the financing side, the recapitalization of PSU banks and support to securitisation of NBFC assets will help provide liquidity and credit flow to the realty sector, he said.
Concorde Group's Executive Director B.S. Nesara said measures focusing on structural reforms like easing the stress faced by the NBFC sector by proposing regulatory parity, allowing FII and FPIs to invest in their debt instruments as ramping up urban-suburban transport systems will give a long-term boost to realty sector.
The Wadhwa Group'a Managing Director Navin Makhija said the government's continued thrust on affordable housing has been reiterated by the proposed 8.4 million houses under the Pradhan Mantri Awas Yojana Urban and another 19.5 million under the PMAY-Rural, besides other tax concessions which will benefit a broader segment of customers and increase demand.
SECCPL Co-Founder Amit Wadhwani said the focus on affordable housing for all, concessions, attracting NRI investments, boost to rental housing, developing major infrastructure project, jobs creation and advancing economic development are positive signs for the realty sector.