Budget 2024 to ensure sustainable growth of real estate: Developers

February 2nd, 2024

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The interim budget stopped short of making big-bang announcements but focused on fiscal prudence keeping fiscal deficit target at 5.1%. It, however, continued to push the growth agenda. The infrastructure capex outlay augmentation to 3.4% of GDP will have a multiplier effect. The focus on creating multi-modal connectivity through new rail corridors, airport and road infrastructure enhancement will support the overall logistics ecosystem while fostering new growth corridors.

The announcement on a housing scheme for the middle-income group and the construction of 20 million homes in rural areas is also positive news for the real estate and allied sectors while spurring the Housing for All agenda even further.

“The announcement on creating and enhancing tourist centres and a ranking framework based on support infra creation will bring hospitality-related development in sharp focus while creating the need and opportunity for associated RE development (holiday homes, second homes, commercial and social infrastructure) in such locations. The same holds true for improving island tourism. The creation of an interest-free fund for supporting R&D and innovation will propel the self-sufficiency and Make in India agenda even further,” said Dr Samantak Das, Chief Economist and Head of Research & REIS, India, JLL.

Supporting investments – domestic as well as FDI — through the extension of tax benefits till 2025 to startups and investments by sovereign and pension funds will continue to spur private investments which remains a focus area.

Taking these things in view, here’s what real estate experts and developers said about the Budget:

Sankey Prasad, Chairman & MD, India and CMD Middle East Project Leaders, Colliers: “Looking at the announcements made by the Finance Minister, we can clearly see the three pillars that real estate players should note: a) addressing social needs, b) closing market specific gaps, and c) connecting the dots to fuel overall growth. The ‘build or buy’ support for urban middle-class is a near-to-medium term opportunity with immediate impact on the people while the announcement on creating and enhancing tourism hubs and a ranking framework based on supporting infrastructure is likely to make hospitality a sought-after subsector. It will bring hospitality-related development in sharp focus by creating the need for holiday homes, second homes, commercial and social infrastructure in the emerging tourist hubs. By promoting rooftop solar systems at household level and creating charging infrastructure for electric vehicles is a big boost towards greening efforts we have been making and will help us widen the ambit of our impact,”

Navin Dhanuka, MD & CEO, ArisUnitern RE Solutions: “Owning a home in India may not be difficult anymore with the investment environment turning more and more accommodating. The interim budget presented by the Finance Minister furthers that commitment to aspiring home buyers as the investment environment remains conducive. The announcement on a housing scheme for the middle class and the construction of 20 million homes in rural areas is positive news for the real estate and allied sectors, furthering the Housing for All agenda for the country, leading to an inclusive economic growth. The high number of female ownership in the Pradhan Mantri Awas Yojana signals a much needed social change. Given that India aims to tread on the path of being a developed nation with women in the front, their economic empowerment remains crucial. The budget today paves the way for more investments – both domestic and FDI, through the extension of tax benefits till 2025 to startups and investments by sovereign and pension funds. Since the real estate sector remains a key growth promoter and is anticipated to grow with a CAGR of 9% by 2028, we are hopeful that the announcement will continue to spur private investments in the sector.”

Vidush Arya, Head-Strategy, Orris Group: “We welcome the budget and anticipate a positive response from the real estate sector. The 11% boost in the infrastructure budget will undoubtedly accelerate growth. Prospective buyers are anticipated to demonstrate a sustained interest in the real estate market as the government declared that the income tax slab will remain stable. It is promising that a 1 lakh crore corpus is being announced for a long term, 50-year loan with low or no interest to support tech-savvy growth in the emerging sectors. This action would boost construction activity, which is good for real estate development in metro cities.

Rajjath Goel, Managing Director, MRG Group: “The increase in infrastructure spending is expected to improve economic prospects, which will benefit both the residential and commercial real estate markets. Additionally, the Finance Minister’s announcement of an 11.1% rise in CAPEX outlays to 11.11 lakh crores for 2025 is anticipated to support the expansion of real estate construction.”

Pawan Sharma, MD, Trisol RED: “The government’s effort to promote manufacturing and increase the CAPEX outlay for 2025 by 11.1% to 11.11 lakh crores will accelerate the pace of infrastructural development. The increased spending proposed by the government on infrastructure will add to the country’s general economic prosperity and drive the demand for residential, commercial and retail spaces. This would bring an overall boom to all the relevant industries as well.”

Ankush kaul, Chief Business Officer, Ambience Group: “The increased spending proposed by the government on infrastructure will add to the country’s general economic prosperity and drive the demand for residential, commercial and retail spaces. The increase in CAPEX will provide a fillip to the infrastructure development, and lead to real estate development.”

Uddhav Poddar, Managing Director, Bhumika Group: “The speed of infrastructure development would be accelerated by the government’s efforts to support manufacturing and raise the CAPEX spending for 2025 by 11%. The country’s overall economic success will be enhanced by the government’s increased infrastructure spending, which will also raise demand for residential, commercial, and retail premises. As tier-2 and tier-3 cities continue to be the focus of development, the government has accelerated the development of these areas by building airports and other modes of connectivity.”

Piyush Lohia, Director, Lohia Developers (INDIA) Pvt Ltd: “The announcement of 2 crore additional houses under the Pradhan Mantri Awas Yojana – Gramin (PMAY-G) in the India Budget 2024 is a significant stride towards addressing housing needs. This move aligns with the growing demand for affordable housing and will contribute to the real estate sector’s growth. Finance Minister Sitharaman’s announcement of a 50% increase in the average real income is positive news, indicating improved purchasing power and potential benefits for the real estate market. Government initiatives to bolster manufacturing and raise CAPEX by 11.1% to 11.11 lakh crores for 2025 will expedite infrastructure development. This proposed increase in infrastructure spending is poised to enhance overall economic prosperity and fuel demand for residential, commercial, and retail properties nationwide. Besides, the announcement to provide housing for middle-class living on rent will provide a fillip to the Tier 2 and 3 cities’ real estate development.”

Dr. Nitesh Kumar, MD & CEO, Emami Realty Ltd: “This is a very positive, inclusive, and balanced budget for developed India; the announcement by the Finance Minister of a middle-class housing scheme that permits residents of unapproved colonies, slums, and rented houses to buy or build their own homes is positive for the real estate market. The goal of this program is to make it easier for them to build or buy their own homes. For the fourth consecutive year, the government has boosted capital investment outlays, allocating 11.11 lakh crores, an increase of 11.1%. This increase in the budget is beneficial since it will encourage more investment and the building of the country’s infrastructure. Infrastructure is essential to a country’s ability to grow and develop because it raises productivity and competitiveness, helps create jobs, and enhances the quality of life for its citizens.”

G Hari Babu, National President of NAREDCO: “This budget perfectly aligns with our vision of fostering a progressive and inclusive India. The government’s commitment to housing development through the Pradhan Mantri Awas Yojana – Gramin is laudable, with the announcement of 2 crore additional houses reflecting a dedicated effort to improve citizens’ lives and address rural housing challenges. Further, the reiteration of a new scheme for the urban middle class population also would boost confidence of both the common man and the real estate sector. We now look forward for a clear roadmap of this scheme. These proactive steps underscore the government’s unwavering commitment to holistic development and the welfare of our people.”

Dushyant Singh, Director, Orion One 32: “Reverberating the idea of Aatmanirbhar Bharat, Geographical Inclusivity, and all-inclusive social justice, the Interim Budget 2024 introduced some key reforms assuring Housing for All, just and equitable distribution of resources, women empowerment in terms of ownership or co-ownership of PM-Awas Yojana homes, and raising the standards of modern infrastructure. By creating a synergetic ecosystem, the Budget 2024 has created a leveling ground, which will lead to an upshift in the absorption of office spaces and mixed-use outlets. The Budget has exhorted programs and schemes for future-ready infrastructure, urban settlements, and housing for all sections of society, causing an inevitable boom in the demand for office spaces, retail shops, and high-street commercials.”

Saransh Trehan, Managing Director, Trehan Group: “The Interim Budget 2024’s proclamations are coterminous with the Government’s commitment to ensure Housing for All. The Finance Minister announced that the Housing for Middle-Class scheme will be launched to embolden and financially assist service class and salaried classes to construct or buy their independent homes. This will empower them to enjoy the basic right of housing as many of them struggle to keep their heads above water and live in slums, chawls, and rented houses. Secondly, the Government also resolved to build 2 crore new homes in the next five years under the PM Awas Yojana- Gramin while being close to achieving its target of constructing 3 crore homes in rural areas and countryside. In its entirety, the Budget incentivized and introduced many pro-people programs that will encourage millions of people to invest in real estate assets, especially in Tier 2 and 3 hubs due to the impetus given to strengthening of modern infrastructure and transport.”

Vasudev Garg, Director, Rajdarbar Realty: “Ensuring Housing for All was the central theme of the Interim Budget 2024 undergirding profound steps taken in the course of attainment of this objective. The Finance Minister announced a new eponymous scheme called ‘Housing for Middle Class’ under which the government will, through wilful measures, assist middle-class and low-income groups in constructing or purchasing their homes and help them accomplish their dream of home ownership. Additionally, the Government has also resolved to build 2 crore new homes in rural regions and villages under PM Awas Yojana-Gramin in the next five years.”

Arvind Singh, Managing Director, Krasa Group: “By advocating the philosophy of ‘Prosperous Bharat in harmony with nature’ and ‘First Developed India’, the Interim Budget 2024 presented by the Finance Minister announced Housing for Middle-Class scheme, Rooftop Solarization, and a new target of PM Awas Yojana-Gramin promising construction of 2 crore homes in the next five years. The idea of Modern Infrastructure and Geographical Inclusivity upheld in the Budget will usher in growth and systematic progress not only in metropolitan regions but also in Tier 2 and 3 realty zones. The demand for office and retail spaces is on a meteoric rise, which will increase manifold after the implementation of the reforms on the grass root level.”

Navdeep Sardana, CMD, Whiteland Corporation: “Outlining the goal of achieving the status of Viksit Bharat by 2047, the Interim Budget 2024 has incentivized the idea of Housing for All by initiating pro-people measures and ramping up modern infrastructural quality, which will invariably increase the demand for office spaces and retail assets in metro cities and nearby towns. As per a CBRE report, retail space leasing activity has shot up by 48% across eight major cities, including NCR, in 2023 in shopping malls and high street locations. The Budget has also given unequivocal importance to uplifting the standards of modern infrastructure to boost national growth and promote growth-inducive factors, that will concomitantly pace up demand and sales of commercial and retail projects in newly-developing corridors and realty zones.”

Source: financialexpress.com

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