Real Estate Weekend Home Developer's view on 2017 Union Budget

This is in reference to the 2017 Union Budget, my clients-

1. Mr. Punit Agarwal (M.D & C.E.O), Nirvana Realty.

2. Mr. Raj Shah (DIRECTOR), Namrata Group

3. Mr. Santosh Naik (M.D & C.E.O), Disha Direct

4. Agyendra Jha (M.D & C.E.O), Wings Lifespaces

would like to share their comment on the impact the 2017 Budget would have on the Real Estate Segment. Please do have a look on what each of these developers have to say.

Punit Agarwal (M.D& C.E.O) Nirvana Realty-

"Budget 2017 looks like a boon for the real estate segment, especially for the weekend home section. With the various policies introduced by the government, it is safe to say that the weekend home segment is going to see some revival that will boost the growth. 

The government's allocation of Rs. 64,000 crores for the development of Highways in the budget, one can easily say that this is going to boost the weekend home segment drastically. Currently, new roads of 133km/ day are getting added against the earlier average of  73 km/day.   It improved the connectivity and accessibility to the weekend home projects as they are usually situated away from the large cities.

With a focus on rural India, the government has introduced various schemes for the upliftment of the regions. The major thrust is on rural infrastructural development. This will play a crucial role in the development of the weekend home segment. Also as the government is initiating schemes for social benefit of the rural population. This will lead to theupgradation of the quality of the projetc.  The quality of the projects in these areas would improve the quality of life of people as highly skilled workers would be involved in the construction work. 

The announcement of infrastructural Status for the affordable home segment will increase the demand for the weekend home projects like our Wollywood and City of Music projects that fall under the affordable home segment. This announcement will help in raising more funds both through the domestic and the foreign funding routes at a better interest rate.

The allocation of Rs 3.96 lakh crore for the overall infrastructural development will eventually tremendously boost the progress of the weekend home segment. 

With the decrease in the tax percentage of almost 15%, the disposable income of the general public resulting in an increase the purchasing power. This will indirectly pull up the demand for holiday homes. 

The Government initiatives like the roll out of Incredible India-2 and the formulation of the 5 tourism zone to promote tourism will prove to be beneficial for the holiday home segment. That means an increase in footfall of International and Domestic tourist, positive for the segment ."

Mr. Raj Shah (DIRECTOR) Namrata Group-

"The much awaited Union Budget is out today with many new announcements for all across all the sectors. The budget is mainly aimed at economic reformation of the poor.

The main highlight are:

- Income Tax rate cut to 5 pc for individuals having income between Rs 2.5 lakh to Rs 5 lakh 

- 15 pc surcharge on income above Rs 1 cr to continue 

- Pace of demonetization has picked up; demonetization effects will not spill over to next year.

- Demonetization will help in transfer of resources from tax evaders to government: 

- The effect of demonetization will not hamper any sector and cash will be sufficiently available in new currency.

For the real estate sector, the expectations were quite high. I would say it is a mix budget for this sector. The allotment of ‘infrastructure’ status to the affordable housing campaign is a positive step taken by the government. The allotment would allow the private players to invest in the ‘housing for all campaign to be completed by year 2022.

Another important announcement made by FM, Arun Jaitley, was that under affordable housing, the carpet area of 30-50 square meters will now be applicable as against built-up area of 30-50 square meters making the area increase of 20 per cent. Capital Gains Tax holding period for immovable property reduced from three years to two years.

However the Finance Minister did not give clarity on GST and also did not award industry status to the real estate segment. Also a single window approval should have been given for the process in this sector to facilitate the entire process."

Mr. Santosh Naik (M.D & C.E.O), Disha Direct-

"Overall the 2017 Union Budget is a good budget in general but mixed for real estate industry which was looking for more from this budget.

The Government's initiatives like- Infrastructure status for Affordable Housing, 1 crore rural houses to be built by 2019, Carpet area will be considered Instead of Built up area of 30 and 60 sq meters for affordable housing will give a huge boost to the affordable housing sector.

Schemes like- Holding period for capital gains tax for immovable property reduced from 3 years to 2 years will get investment from retail investors further adding to the development of this sector.

Few policies undertaken by the government will give required boost in terms of sales and development. Some of these policies include- New FDI policy under consideration, Rs 2.41 lakh crore has been allocated to boosting infrastructure for transportation, Total allocation for the infrastructure sector is Rs 3,96,135 crore and Allocation for National Highways to be at Rs 64,000 Crore.

However, the neglected areas in budget are increase of tax exemption in interest, ease of finance to industry and speedy approvals that would have proven beneficial to the real estate sector."

Mr. Agyendra Jha (M.D & C.E.O), Wings Lifespaces-

"The Union Budget comes across as a bonanza to the Real Estate Sector. This is especially due the Infrastructural Status given to the Affordable Home segment. The introduction of this policy will help the developers in raising adequate funds both from various funding routes and that too at a better interest rate. This policy will subsequently help in increasing demand in this sector. Also policies like '1 crore rural houses to be built by 2019' and 'Carpet area will be considered Instead of Built up area of 30 and 60 sq meters for affordable housing' will boost the affordable home segment massively.

The reduction in the LTCG holding period from 3years to 2 years will benefit our investors and will get more investment from investors especially the retail ones which in return will boost the growth of the Real Estate segment. 

Also the descrease in the tax % will have positive impact on the Real Estate Segment in terms of demand. As this reduction will result in an increase in the disposable income of the general public who will then invest their savings in this segment."

Tweet

Subscribe to receive free email updates: