As the Interim Budget 2024 unfolded, real estate stakeholders eagerly anticipated significant announcements that could shape the industry’s trajectory. While the budget did not bring about big-bang changes, it maintained a focus on infrastructure upgrades and nationwide connectivity, promising indirect benefits for real estate growth, especially in Tier 2 and 3 cities.
Anuj Puri, Chairman – ANAROCK Group
Among the positive takeaways were announcements related to PM Awas Yojana (Gramin), which, despite challenges, continued its implementation, achieving the target of close to 3 crore houses. The commitment to constructing an additional 2 crore houses in the next five years is expected to have a positive impact, freeing up encroached areas for redevelopment.
The capital expenditure outlay allocation saw an increase of 11.1% to INR 11,11,111 lakh Cr, accounting for 3.4% of GDP. This heightened allocation is seen as a potential catalyst for real estate development, especially as it focuses on various infrastructure upgrades and new projects.
The introduction of transit-oriented development in urban areas could provide a boost to housing demand, potentially leading to a rise in residential prices. Similarly, the development of iconic tourist centers is expected to favorably impact the hospitality sector, benefitting hotels and restaurants across categories.
Extending tax benefits to startups for another year is anticipated to have a rejuvenating effect on the office real estate sector. Despite these positive aspects, certain key expectations of the real estate industry were left unmet in the Interim Budget.
The long-standing demand for industry status, seen as a gateway to benefits such as easier access to credit, tax breaks, and infrastructure development, was not explicitly addressed. Tax incentives for homebuyers, including an increase in the deduction limit on home loan interest under Section 24, remained unaddressed as well.
The expectation of boosting allocations for schemes like PMAY (Urban) to enhance affordability and encourage new projects in the affordable housing segment saw no major announcements in the Interim Budget.
While the budget did not directly tackle these key demands, industry players are now looking ahead to the upcoming Union Budget for more concrete measures that could address these concerns and potentially impact market trends.
Akash Pharande, Managing Director – Pharande Spaces
Unfortunately, the Interim Budget 2024 did not bring any direct positive changes for India’s housing industry, leaving unfulfilled expectations for industry status, tax benefits, and boosts for affordable housing. Despite this, there are avenues for cautious optimism.
The focus on infrastructure spending, though not directly allocated for housing, could indirectly benefit the industry by improving connectivity and fostering overall economic activity. While the budget lacked specific allocations for affordable housing, the government’s recent emphasis on “Housing for All” and Pradhan Mantri Awas Yojana (PMAY) could potentially translate into concrete measures in the future.
The absence of negative changes in the budget is seen as a positive in the current economic environment. Even without direct intervention, government policies influencing interest rates, inflation, and economic growth can significantly shape the housing industry.
As the Interim Budget sets the stage, industry players are now keenly awaiting the main Union Budget in February, anticipating more substantial announcements that could potentially address concerns and provide a clearer direction for the housing industry.
Avneesh Sood, Director – Eros Group
The Union Budget 2024 is viewed as a pivotal moment for the Indian real estate sector, signaling a focus on inclusive development. Notable announcements include the commitment to PM Awas Yojana Grameen, targeting 2 crore houses, and a special scheme for the middle class. The success of PM Awas Yojana Grameen, nearing 3 crore houses, and the promise to construct an additional 2 crore houses in the next 5 years underscore the robust momentum in the housing sector.
The budget’s acknowledgment that over 70% of houses under PM Awas Yojana go to women reinforces the socio-economic impact. The doubling of airports to 149 and the announcement of the India Middle East Europe Economic Corridor reflect a positive outlook for infrastructure and economic activities. With FDI inflows at $596 billion, the real estate sector anticipates sustained global investor confidence.
Incorporating Rooftop solarisation aligns with sustainable living goals, contributing to an eco-friendly real estate landscape. Overall, Budget 2024 sets a transformative path for real estate, aligning with national development objectives.
Dr Niranjan Hiranandani, Founder, Hiranandani Group and Chairman, National Naredco
Dr Niranjan Hiranandani shares insights on the Union Budget 2024, expressing appreciation for an integrated and equitable growth budget. He notes the budget’s focus on social reforms, boosting the economic growth value chain, emphasizing sunrise sectors, and providing impetus to urban and rural housing with mega infrastructure projections. Recognizing India’s rise in global leadership, he highlights the country’s role in setting new standards and establishing strong geopolitical alliances.
The comprehensive GDP growth mantra, aligned with the objective of Sab ka Saath, Sab ka Vikaas, contributes to the buoyancy in the domestic economy. Dr Hiranandani emphasizes that keeping the fiscal consolidation target at 5.1% will decrease the cost of borrowing for businesses and industries, stimulating economic growth, stabilizing the economy, and reducing the risks of inflation.
The 11% increase in infrastructure outlay is seen as beneficial for the growth of residential, commercial, and industrial real estate across geographies. The multi-modal corridor connectivity, new railway corridors, and the doubling of airports and ports corridors are expected to have a multiplier effect on the real estate landscape.
The extension of the PMAY scheme for rural areas aligns with the objective of Housing for All, addressing the housing deficit needs of the urban poor with a focus on the buy or build house motto. The continuous skilling and upskilling of the working populace are emphasized to provide a competitive advantage and increase employment opportunities.
In conclusion, Dr Hiranandani states that India’s vision for Amrit Kaal is clear, and the country is on track to becoming Vikshit Bharat by 2047.
Mr Darshan Hiranandani, Founder, NIDAR Group
Mr Darshan Hiranandani lauds the Union Budget 2024 as a landmark one, outlining a sustainable growth roadmap under the leadership of Prime Minister Narendra Modi. He highlights key elements, including the provision of free solar electricity, an affordable housing program for the middle class, and the development of EV charging infrastructure. The budget is seen as a step towards creating a Viksit Atmanirbhar Bharat, stimulating inclusive and equitable growth in the Indian economy, and fostering a positive business climate in the country.
These insights from industry leaders provide a multifaceted view of the Union Budget’s impact on the real estate sector, acknowledging positive measures and outlining expectations for continued growth and development.
Mr. Ashwin Sheth, CMD of Ashwin Sheth Group
Mr. Ashwin Sheth, CMD of Ashwin Sheth Group, expressed appreciation for the strategic direction outlined in the 2024 interim budget, especially its focus on strengthening the affordable housing sector through increased allocation for the Pradhan Mantri Awas Yojana (PMAY). This highlights the government’s commitment to encouraging inclusive real estate development and recognizing the importance of affordability in addressing housing needs comprehensively.
The allocation of 70% of PMAY houses to women in rural areas is particularly significant, contributing to providing secure living spaces and advancing women’s empowerment. The progress in implementing PM Awas Yojana (Grameen), nearing the target of three crore houses, with a commitment to constructing two crore additional houses over the next five years, reflects the government’s dedication to meeting the growing demand for housing in rural areas.
Maintaining a delicate balance between promoting affordable housing and ensuring sustained growth across all segments is crucial. This approach will undoubtedly create an environment conducive to growth, investment, and the holistic development of the real estate ecosystem. Additionally, the increased outlay for infrastructure to Rs 11.11 lakh crores in FY25 is a welcomed move, providing further support for overall growth and development in the sector.
Also read: Mumbai Real Estate Sees 21% Jump in Registrations