“We are disappointed. We expected much more from the government to kickstart the economy,” said Niranjan Hiranandani, managing director, Hiranandani Constructions.
Though the stimulus packages announced in recent months did benefit the real estate sector, the industry was expecting more relief after a humbling year in which the sector which rarely saw anything but a boom saw a slump in demand, oversupply and stagnating, if not falling, prices.
“Shining India” with high economic growth had resulted in industry borrowing huge sums of money to build malls, apartments, IT parks and offices. Now, the industry is looking for tax incentives for small homes and easier loans for home buyers, as affordable homes look more real than other things.
Industrialists believe the real estate sector needs help because stimulating this sector is a worldwide practice during slump conditions.
“By definition, an interim budget has its limitations. We had nevertheless hoped that it would factor in the overall languid state of the real estate sector and provide measures that will assist in energising it,” said Anuj Puri, Chairman & Country Head, Jones Lang LaSalle Meghraj.
The sector got prominence from 2004 when home lone interest rates crashed to 7.5 per cent enabling many home lone seekers to own houses. Soon after there was a bull run in this sector which grew by over 100 per cent year on year till the bubble burst in 2008.
The industry is now licking the wounds caused by acquisition of high-cost land, high borrowings, overpricing and irrational exuberance on demand.