Here is how Real Estate Industry Reacted on Budget 2018

2018 Union Budget managed to impress some people while depressing others. Like other industries, real estate sector also had several expectations from this year’s budget. The industry has hailed the decision of dedicated affordable housing fund but also stated that there are no as such major provisions meant for the realty sector.

Let’s see what industry’s who’s who has to say about Budget 2018:

Kishore Bhatija, Managing Director, Real Estate Development- K Raheja Corp feels that however, the real estate industry 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 but still the progressive nature of the budget has paved way for economic growth. Having said that Bhatija added, “Changes in corporate taxation will incentivise many to invest, and be competitive. Overall the budget creates an environment for inclusive growth, and infuses transparency into the system.”

Govind Sankaranarayanan, Chief Operating Officer, Retail Business & Housing Finance, Tata Capital welcomed the Budget 2018 and said, “The Budget 2018 announcement seems to have struck a delicate balance between the populist demands and fiscal prudence, given the past year’s subdued economic growth. The setting up of a dedicated Affordable Housing Fund reinforces the government’s commitment to this sector, which should also provide an additional fillip to the real estate sector and financial institutions supporting the government’s Pradhan Mantri Awas Yojna scheme. Overall, the various initiatives should generate rural incomes and create jobs which should ultimately result in consumption.”

Ram Walase, MD & CEO, VBHC Value Homes Private Ltd feels that the budget is an incrementally positive budget for the housing sector. If the budget achieves its job creation objectives, the housing sector would also benefit.

He further shared some additional positives in the budget for the housing sector:

•In the recent past, equities had become a most favoured asset class for investors. 10 percent LTCG tax on equities would encourage investors/ home buyers to explore real estate and other asset classes

•Banks have been limiting their exposure to real estate/ housing sectors. Two positives from the budget for financing of housing sector: (a) creation of housing fund under NHB to promote housing finance under priority sector, and (b) push for 25 percent of debt for large corporate through bond markets, which may free up some bank financing for other sectors including real estate

•NHB shareholding to shift from RBI to Government. This would mean a shift towards development orientation from the existing regulatory approach.
Samyak Jain, Director, Siddha Group shared that this Union Budget 2018-19 can now be termed as a Pro-India budget that will ensure an all-round growth of the economy and boost the nation’s GDP. "Infrastructure development, a key factor in the growth of real estate has been given significant importance and we welcome this move as improvement in road and rail connectivity will be instrumental in changing the face of the industry. Initiatives to boost affordable housing sector will lead to the fruition of the government’s ‘Housing for all by 2022’ vision. Additionally, we appreciate the government’s efforts to advance their smart cities project which aims to improve the quality of life. Job creation was the need of the hour and we applaud the positive outlook towards employment in rural development and healthcare services. We anticipated some announcements on income tax relief, single window clearance, granting industry status to real estate and clarity on GST with respect to subsuming stamp duty and registration charges but we hope the government takes measures to address this in the near future. The proposed budgeted expenses in various sectors; Rural Infrastructure, Health and Fishing will have a positive impact on the economy allowing us to be optimistic about the real estate market and we look forward to a productive year.”