Government Finally Walks The Talk In Addressing Reasonable Housing, However Larger Real estate problems unaddressed
In the article we’ll be discussing a important topic that’s “Government walks the talk in addressing affordable housing, but larger real estate issues unaddressed” let’s talk about it in detail:
As the has already given introduction, the govt in Budget 2018 has continued with its thrust for reasonable/affordable Housing and ‘Housing for All’ scheme. Furthermore, the government has been consistent with its efforts in addressing affordable housing in 2017 – be it giving Infrastructure status to this particular segment within the previous budget, to actually help increase the quantum of beneficiaries in CLSS under PMAY (Pradhan Mantri Awas Yojana) by further expanding the carpet area as well as re-defining income definitions. Now, Budget 2018 has actually given impetus to reasonable housing by creating quite a dedicated fund under the National Housing Bank (NHB). This fund will further be provided for from priority sector lending and fully serviced bonds authorised by the govt of India. Now that the govt has created significant enablers to increase demand and to actually create favourable conditions, we should hopefully see a major spike in new launches/supply within the coming days in the affordable housing segment.
It is also encouraging to see the govt address the problems of housing in urban areas. Furthermore, while providing assistance to construct 37 lakh houses in urban areas will further take care of the urban housing woes, financial assistance (Rs.2.04 lakh crore) to 99 Smart Cities will further ease the pressure on the existing urban centres. Further, the minister of finance also proposed that no adjustment shall be made in respect of transactions in immovable property, where the circle rate value doesn’t exceed 5% of the consideration, this might further affect solely those localities where circle rates are much more higher than prevailing market rates. Moreover, the govt. steered clear of further tax breaks for either for the buyers or the industry.
That said, the govt has been actively regulating the real estate industry over the last several quarters. From demonetisation aimed toward curbing the effect of unaccounted money; to RERA which can help bring in consumer confidence, the real estate sector has seen significant regulatory influence in the past year.
While the budget is now done and dusted, there are still some matters which might assist drive the industry ahead much more vigorously. We hope that going ahead the government will
(a) address the problem of GST on new homes which is currently inflationary
(b) examine the problem of lowering the price of transactions, particularly stamp duty and registration fees
(c) create enablers for the sector like guaranteeing or insuring land/property titles; digitisation of property registries; enhancing liquidity in real estate markets through REITs and several other means and
(d) strengthen RERA in order to resolve disputes speedily as well as assist drive confidence amongst consumers.
As we’ve been saying for a while now, there are green shoots emerging within the industry once again and we expect a gradual recovery within the course of 2018. With the govt. having done its bit, there’s now requirement for concerted as well as purposeful action from developers and many other stakeholders within the industry to actually do their bits and thus help the process for a much better 2018 for real estate.
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