Union budget: Mumbai realtors not too happy; low-cost homes to get boost
According to realty experts, the sector was expecting some big-ticket announcementsUpdated: Feb 02, 2018 11:15 IST
The Union Budget has proved to be a disappointment for the real estate industry in Mumbai and the Mumbai Metropolitan Region (MMR), where it is awaiting revival. The only good news is in the affordable housing segment as the Centre has announced a special fund for the same through the National Housing Bank.
The realtors in Mumbai — one of the biggest real estate markets in India -- were expecting some incentives to help them come out of the slowdown.
According to realty experts, the sector was expecting some big-ticket announcements. “It was hoped that this year’s Budget would finally address the need to put in place single window clearance and accord infrastructure status to the realty sector,” said Anshuman Magazine, chairman, India and South East Asia, CBRE. His view was supported by Ramesh Nair, CEO and country head, JLL India. “The Union Budget did not have any direct impact on the real estate sector. There are no changes in Income Tax sops or other direct measures that influence the sector. The demand and supply dynamics of real estate sector get no further intervention,” said Nair.
Many expected that the government would solve the Goods and Services Tax (GST) tangle that is acting as a huge burden for the homebuyers. They wanted it to reduce the GST or merge it with stamp duty as it totaled an exorbitant 18 %.
However, builders welcomed finance minister Arun Jaitley’s announcement of a dedicated fund for affordable housing. “It will boost buyers’ sentiments and help revive the real estate market,” said Venkatesh Gopalkrishnan, chief executive officer, Shapoorji Pallonji Real Estate. “The announcements made by the government are very optimistic for affordable housing and will definitely attract more corporate players to enter this space,” said Rajeev Piramal, vice-chairman and managing director, Peninsula Land Ltd.
Though there is not much scope for low-cost houses in Mumbai due to high prices of land, several affordable housing projects are coming up outside Mumbai in the MMR region. While the builders are busy constructing small sized compact houses, various factors like red tapism, GST and stamp duty are acting as a deterrent. As a result, sales continue to languish and inventory rises by the day.