Budget 2024-25: Here is what experts expect for the real estate sector

Experts foresee a progressive outlook for the real estate sector in the Interim Budget for 2024–25. They anticipate key reforms to stimulate demand and boost investment in the sector, including providing infrastructure status to affordable housing, lower GST rates, and simplified taxation structure for REITs. Experts suggest debt restructuring options for stressed developers, improved credit availability, and digitisation initiatives to enhance transparency. Overall, the real estate sector is hopeful of a comprehensive policy framework in the 2024–25 Budget to augment growth and resilience in the post-pandemic era.

In this Budget, the government should take a closer look at the affordable housing segment. A sunrise segment of the realty market, the category suffered a decline in sales during the pandemic. It comprises just 20% of the total housing sales, a marked difference from pre-pandemic days when it accounted for 40% of sales. Through carefully curated policy impetus, tax breaks, and fiscal support, governing agencies need to help the sector revive, as it will be instrumental in bridging the widening housing gap.

Gurmit Singh Arora, National President, Indian Plumbing Association:

No doubt real estate is on a strong footing and the segment is poised to grow vigorously in 2024. However, regulatory bodies and governments also need to play a pivotal role by integrating affordability and long-term sustainability. Indian urban centers still suffer from acute housing shortages, and reports have suggested that by 2030, India will need an additional 25 million homes to bridge the gap. However, the government needs to take proactive steps in this regard.

Besides lowering the lending rates in the affordable segment, the definition of affordability should be tweaked so that a greater number of households can come under its ambit. Developers should also be incentivised via better funding options, tax discounts, and R&D support. This will make the category sustainable in the long run. In tandem with affordable housing, GOI should also think about reducing repo rates and investing in long-term public infrastructure. Moreover, Buildings account for about 40% of the carbon emissions worldwide. 11 % comes from materials used, and 28% comes from Operational Carbon. Buildings, unlike vehicles, are also an asset class built for 50 to 70 years. Hence, if we want to decarbonize India and achieve carbon neutrality, then we need to build buildings that are mandatory-certified green.

LC Mittal, Director, Motia Group

The Indian real estate sector is critical to the economy and contributes to around 8% of the GDP. It is also the second biggest employment generator after the agriculture industry, and more than 200 ancillary industries rely on it. Hence, the government should take proactive steps to boost the demand, rationalize the cost, and reduce the regulatory bottlenecks. In the coming budget, the governing agencies should look into giving real estate the industry status which is long due alongside mulling over single window clearance, tax breaks, and GST rationalisation. This would not just be beneficial for the realty industry, but the positive impacts will cascade into other related industries.

, Director, Goel Ganga Developments

The Indian real estate peaked in 2023 with sales close to 5,00,000 in major cities, growing Y/Y by 31%. The bullish sentiments in the market will further continue in 2024 backed by a healthy macroeconomic outlook, stable lending rates, and an upbeat job market. Meanwhile, the government should also bolster growth through prudent initiatives. One of them could be increasing the tax rebate on income tax to INR 5 ahs from 2 lakhs. This will attract genuine homebuyers and boost the demand. Likewise, it should look into other parameters such as reducing the repo rates, offering tax holidays to developers, and finding other alternative sources of project funding.

Atul Monga — CEO& Co-founder, BASIC Home Loan

As of 2024, the Indian real estate sector has specific expectations from the Interim Budget, particularly concerning home loans and affordable housing. The industry is advocating for a significant increase in the tax deduction for home loan interest under Section 24 of the Income Tax Act. Currently capped at INR 2 lakh, there is a push to raise this limit to at least Rs 5 lakh. This adjustment is expected to revitalise the market, especially in the budget homes segment.

Furthermore, there is an urge from the government to reevaluate the qualifying criteria for affordable housing. The current price limit of up to Rs 45 lakh for affordable housing is seen as unrealistic for major cities. For instance, the metro city's budget can be increased to around Rs 70–75 lakh. Adjusting these limits would make more homes accessible to a broader range of buyers, enabling them to benefit from government subsidies and reduced GST ratesAnother significant expectation is the release of government-owned land for affordable housing. This move would address the land shortage in this crucial housing segment and potentially lower real estate prices overall. These changes are anticipated to bring a decisive boost to affordable housing, which has been severely affected by the pandemic, especially among its target audience.

These expectations highlight the sector's focus on making housing more accessible and affordable, particularly in light of the economic challenges posed by the pandemic and subsequent market shifts.

There is also high expectation for implementing the interest subvention scheme for urban housing. This scheme, introduced in October, pending cabinet approval, aims to provide significant interest subsidies on housing loans, potentially extending the cap to Rs 50 lakh under the Pradhan Mantri Awas Yojana. This scheme aims to provide an annual interest subsidy ranging from 3% to 6.5% on loans up to Rs 9 lakh. This move is expected to significantly boost the demand for home loans, aiding a vast segment of urban homebuyers, particularly those in lower-income groups, and revitalizing the housing market.

Lucy Roychoudhury, Head of Sales, Marketing, and CRM of Runwal Group

With the upcoming 2024 central election, expectations are high for a well-balanced budget that combines growth-focused measures with populist initiatives. The government's commitment to growth strategies, evident in improved road connectivity, enhanced rail infrastructure, and initiatives such as localising imports and developing value chains for electronics or electric vehicles, is anticipated to persist in the upcoming budget. This continuity will reflect the government's clear vision and approach towards fostering economic development. To continue the momentum for the residential sector, a cut in tax rates is crucial as it will provide an impetus to homebuyers' purchasing ability.

Chulamas Jipatima (Amy), Country Director, MQDC India

We eagerly await Budget 2024, hoping for policies that not only promote economic resilience and innovation but also streamline the ease of doing business. Co-working spaces have played an important role in molding the modern workforce, and we look forward to efforts that encourage the expansion of collaborative ecosystems.

We anticipate a future where workspaces are not only dynamic and inclusive but also supported by a reduction in the number of compliances, providing a more conducive environment for startups and entrepreneurs to thrive. As advocates for the entrepreneurial spirit, we hope for tax incentives and announcements that actively encourage startups to set up offices, fostering a culture of innovation and growth.

Pankaj Narang, Founder & Director, Blitzkrieg Co.

We anticipate three pivotal measures that can catalyse our industry's growth and contribute significantly to propelling India toward a 5 trillion-dollar economy:

Lower interest rates: Over the past two years, customer EMIs have witnessed a substantial surge of 30–40 per cent. A strategic reduction in interest rates can not only alleviate this burden on consumers but also substantially enhance buying power, thereby fueling growth in the real estate sector.

Increased home loan deduction slab: To position real estate as a preferred investment, it is imperative to elevate the home loan deduction slab across diverse sections of society. This move encourages homebuyers and stimulates economic activity within the real estate market.

Amplified focus on real estate: Recognizing the domino effect, it's high time real estate garners increased attention. As the second-largest sector in generating employment opportunities and with hundreds of ancillary industries relying on its vitality, fostering growth in real estate will inherently contribute to the overall economic landscape.