Budget 2017 wishlist: Expectations from the real estate sector

Real estate is largest employer after agriculture and is slated to grow at 30% over next decade

Industry size: India’s real estate market is expected to touch $180 billion by 2020
Source: India Brand Equity Foundation

Employment figure: The Indian real estate sector has backward and forward linkages to approximately 265 ancillary industries. It employs over 50 million people. Budget 2017In India, real estate is the largest employer after agriculture and is slated to grow at 30 per cent over the next decade
Source: National Skill Development Corp

Contribution to gross domestic product (GDP): Real estate contributes over six per cent to the country’s GDP
Source: India Brand Equity Foundation

Key issues or areas of concern for the sector

• Slow pace of sales leading to large unsold inventory (large demand-supply gap)
• Lack of investment support and insufficient funds, especially for project construction

Industry demands

• Infrastructure status for real estate, special economic zones and industrial parks
• Increase limit of priority sector lending in home loans
• Streamlining approval process

PwC point of view
Abhishek Goenka, Partner (real estate), PwC
Real estate investment trusts are likely to be a game changer for the commercial real estate sector
The Real Estate Regulatory Act will increase regulatory and legal compliance

R K Arora, Chairman, Supertech
“GST is expected to lessen the tax burden on developers on input items such as cement and steel, by removing multiple layers of taxation and instituting the tax credit system. That said, the actual merit or demerit of GST will only be known when the final rates are set”

Real Estate: Key expectations from Union Budget 2016

The Union Budget is an eagerly-awaited annual event which Indians follow closely, as the decisions and allocations announced by the Finance Ministry have great pertinence to both individuals and industries. The real estate sector is sensitive to many of policies that are announced both for various industries and individuals. The realty sector is just emerging from a prolonged and painful slowdown, and is looking for all and any signs of light at the end of the tunnel. This fact makes Union Budget 2016 all the more critical, and the real estate industry has many expectations from it.     

·Offer financial protection from project delays to home buyers

The Union Budget 2016-17 should pay specific heed to this pressing need. On purchase into an under-construction property, buyers can only claim tax benefits of Rs. 2 lakh after possession if construction is completed within three years. The benefits reduce to Rs. 30,000 if the builder delays construction beyond this - and they pay higher interest. First-time home buyers purchasing properties for self-use additionally pay rent.

Buying property online

Buoyed by the success of its previous sale during the festival season two months back where over 9,500 buyers registered on the website, Snapdeal has launched another online real estate shopping festival that showcases over 100 properties from all over India.

Most discounts are straightforward discounts on the selling price. A buyer can get a discount of up to Rs 2 lakh on Sunteck's City Avenue 1 project in Goregaon West in Mumbai that selling at Rs 16,500 a square foot.

Ruparel Realty's Primero at Tilak Nagar in Mumbai offers discount up to Rs 2.3 lakh that's selling for Rs 12,600 a sq ft and starting at Rs 85 lakh.

Axis Bank Buys 200,000 Sq Ft Of Office Space In Mumbai

          
 In one of the largest office property deals in this city, Axis Bank recently bought 200,000 sq ft of space at The Ruby office complex in the Dadar West area for Rs 320 crore, said an executive.

          The deal was in the previous quarter and at Rs 16,000 a sq ft, said the executive. The Ruby Mills developed the property, a one million sq ft commercial project, in partnership with Rohan Lifescapes.

          "It could be a structured deal, where Axis Bank could have lent money to the owners of the property in the past," said the executive, adding no broker was involved.

           An e-mail to Axis Bank did not get a response. Senior executives at The Ruby Mills did not return calls or reply to messages on the subject.