Guest Column: Budget boost for realty sector
The Union Budget 2024 aims to transform India’s real estate sector by focusing on affordable housing, urban development and infrastructure growth. This Budget tackles key challenges and creates new opportunities for developers, investors and homebuyers.
Ambitious housing plans and investment
At the forefront of the Budget's real estate initiatives is the ambitious plan to develop an additional 3 crore homes under the Pradhan Mantri Awas Yojana (PMAY) in both urban and rural areas. This massive undertaking is backed by a substantial investment of ~10 lakh crore, including a central assistance of ~2.2 lakh crore over the next five years.
This significant allocation demonstrates the government’s commitment to addressing the housing shortage and stimulating demand across various segments of the real estate market.
The PMAY 2.0 initiative specifically targets one crore urban poor and middle-class families, aiming to make homeownership more accessible through affordable financing options.
The provision of interest subsidies for both lower-income and middle-income groups is expected to boost affordability.
Urban development and infrastructure
The Budget’s emphasis on urban development as one of its nine key priorities signals a focus on improving city infrastructure and amenities. This approach is likely to increase property values and attract more investments to urban areas.
The government’s proposal to introduce transit-oriented development in 14 major cities aims to prioritise sustainable growth and efficient transportation. This initiative is expected to transform urban landscapes, enhancing the quality of life for over 30 lakh citizens.
Furthermore, the development of industrial parks in 100 cities under the Industrial Corridor initiative is poised to create new real estate opportunities in these areas.
Innovative housing solutions
The Budget introduced several innovative approaches to address housing needs, particularly in industrial areas. The proposal for rental housing with dormitory-type accommodation for industrial workers, to be developed through public-private partnerships (PPP) with Viability Gap Funding (VGF) support, is a novel solution to the housing challenges faced by the industrial workforce.
This initiative opens up new opportunities for real estate developers in the affordable housing segment and addresses a critical need in rapidly industrialising areas.
Empowering women through reduced stamp duty
The government is introducing a stamp duty reduction, particularly benefiting women purchasers. If a woman buys property, the stamp duty and registration fees will be lower.
This reduction aims at making property purchases more affordable for women, potentially leading to an increase in female homeowners.
The Central government is also encouraging state governments to reduce stamp duties for women by offering incentives to those that implement these measures.
Sustainable development and digitisation
The Budget’s focus on sustainable development through solar and renewable energy, as well as water and solid waste management, aligns perfectly with the goal of climate-resilient real estate development. These initiatives are expected to have a long-term positive impact on the sector, making properties more environmentally friendly.
Additionally, the push for digitisation of land records and GIS mapping is set to bring more transparency and efficiency to real estate transactions.
