Budget 2013 boosts affordable housing sector
NBH is setting up an Urban Housing Fund with an allocation of Rs 2,000 crore to infuse liquidity for urban housing and to boost demand in the city.
According to NHB, the budget will boost the affordable housing with an additional interest benefit of Rs 1 lakh on first-time home loans up to Rs 25 lakh.
Analysts feel that, this will benefit the housing sales in tier 2 and 3 cities and peripheral areas and distant suburbs of metros, but not within the metros, where housing is more targeted towards the mid and upper income segments.
Gautam Mehra, executive director, PricewaterhouseCoopers (PwC) India commented that the new budget will benefit the real estate sector. The industrial corridor of Delhi-Mumbai and Chennai-Bangalore seems to be developing as ‘Smart’ cities.
Even additional tax incentive on the home loan interest is appreciated and the increase in service tax will have a negative impact on luxury home buyers. However, the developers will be disappointed with the re-implementation of TDS provisions.
The budget on whole was not as daring as it was anticipated. Although the finance minister has mentioned all the important features to attain economical growth, like encouraging FDI, to reduce fiscal deficit, rationalize expenditure, but actually the budget did not take any steps to attain these goals. The budget has cut the limit of subsidy on service tax for housing over Rs. 1 crore, by 5%.
Long-term capital is needed for real estate and infrastructure sector and this capital can be achieved through FDI, debt/bonds, insurance companies, pension funds, long-term saving instruments etc and also promoting the private investment.
It is expected that the measure proposed in the budget will aim for promoting infrastructure growth and the required change in financial sector and industrial development will be implemented properly to push the nation towards a high economical growth.
Anuj Puri, chairman and country head, Jones Lang LaSalle India, has commented on the budget that measures taken on education and job creation is well-appreciated. In real estate sector, production of job is necessary and expects more schools to come up. In India, education seems to be included in real estate now and will be benefited in mid-to-long term.
However, analysts feel that many important areas have been overlooked, such as, implementation of real estate regulator and the Land Acquisition Act.
Related Real Estate News:
Delhi NCR witnesses boom in real estate
Delhi: Property rental up by 20 percent
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