Budget 2018: Realty players welcome affordable housing fund
PTI February 1, 2018
The real estate industry has welcomed the move to promote affordable housing and setting up a separate fund under the National Housing Bank to lend to the priority sector, even as it expressed disappointment over non grant of industry status.
"The government has continued its focus on housing for all by 2022 by announcing a dedicated affordable housing fund under priority sector lending. We believe that the fund, which will be set up in collaboration with National Housing Bank, will provide ease of credit to homebuyers, thereby giving a much-needed boost to demand for low-cost homes across the country," Cushman & Wakefield country head and MD Anshul Jain said.
Shapoorji Pallonji Real Estate CEO Venkatesh Gopalkrishnan said, "the creation of the fund will boost buyers' sentiments and help revive the realty market. We expected the government to give industry status to real estate sector, though its efforts to support infrastructural developments laudable. This will have some impact." Omkar Realtors and Developers chief marketing officer Manoj Paliwal, said rural infrastructure push will surely boost added housing in these areas resulting in employment.
Credai national president Jaxay Shah said the realty sector recently received a major reduction from 12 per cent to 8 per cent in GST and this budget has added to this concession for housing by adopting a target of 31 lakh homes in 2018-19 to be built in urban areas and 51 lakh in rural areas. Tata Housing MD and CEO Brotin Banerjee said the high impetus to ease the mode of transportation by modernising railway infrastructure and road development with improved railway network and accessibility generally has a multiplier effect on real estate sector.
"This will lead to opening up additional land parcels with physical infrastructure leading to rise in affordable housing projects across the country," he said. Sunteck Realty CMD Kamal Khetan said the allocation of Rs 14.34 lakh crore fund towards rural housing, rural roads and rural infrastructure will help in creating employment opportunities. Puravankara MD Ashish Puravankara said, "a robust road map for housing for all was laid during the budget last year such as infra status to affordable housing and tax holiday for affordable housing and now the establishing of a dedicated affordable housing fund under the NHB will give it a huge fillip too."
Paarth Infrabuild chief operations officer Abhishek Singh said the industry was expecting the sector would get industry status and benefits to new home buyers may have received through relaxing the tax slabs or tax benefits to developers, which did not happen. K Raheja Corp MD, Kishore Bhatija said the sector was seeking some very important amendments like the industry status, streamlining of taxation norms for REITs, rationalisation of GST, and extension of tax SOPs for SEZ units, which we hope will be addressed soon.
Sobha's vice-chairman and MD JC Sharma said, "to minimise the hardship in real estate transaction, the finance minister's proposal that no adjustment shall be made in a case where the circle rate value does not exceed 5 percent of the consideration is a welcome step." KPMG's Neeraj Bansal said both the buyers as well as the developers were expecting much from this Budget in terms of improving the purchasing power of the buyers as well as simplification and clarification on some of the key tax issues concerning the sector.
"The investor and corporate class were largely left wanting and proposals for the real estate and construction sector, which is currently witnessing considerable headwinds owing to weak demand and transformational reforms, are no different. Amendments were also expected on taxability of REIT structures to augment this alternate investment mechanism for the investors, which did not happen," he said. Naredco President Niranjan Hiranandani said the finance minister has managed to balance populist demands, the need to support economic growth.
"It was also positive to see suburban railways in Mumbai find a mention in the budget, with Rs 11,000 crore of outlay. Improved railway network and accessibility generally have a positive multiplier effect on real estate," he added. Shree Krishna Group MD Sundeep Jagasia said setting up of the dedicated fund for affordable housing and inclusion of affordable housing loans under priority sector lending will increase the credit availability for real estate sector. Echoing similar views DOTOM Realty MD Manoj Vishwakarma and Transcon Developers VP sales and marketing Sarojini Ahuja opined the budget lacked clarity on various aspects of the sector.
Duville Estates director Tushad Dubash said the smart cities mission is an ambition to develop 100 cities across India that would also harness the Information Communication Technology (ICT) capabilities. "Infrastructure is a growth driver for the country and the budgets focus on infrastructure and connectivity will have an impact on not only the real estate sector but the economy on the whole," he said