The dust has settled on the Interim Budget 2024, leaving the real estate sector cautiously optimistic. While the budget lacked major pronouncements, it subtly paints a picture of potential growth, fueled by infrastructure advancements and improved connectivity across the nation.
The successful implementation of the PM Awas Yojana (Gramin), achieving the target of nearly 3 crore houses, marks a promising milestone. The scheme, aiming for an additional 2 crore houses in the next five years, sets the stage for a significant expansion in housing accessibility.
The commitment to launch a Middle-Class Housing Scheme stands out as a move to empower the middle class in acquiring homes. This initiative not only addresses housing needs but also holds the potential to free up encroachment-prone areas, facilitating smoother redevelopment.
A noteworthy aspect of the budget is the 11.1% increase in Capex outlay allocation, amounting to Rs 11.11 lakh crore (3.4% of GDP). This substantial rise is anticipated to unlock potential in real estate development through diverse infrastructure upgrades and the initiation of new projects.
The strategic focus on Transit-Oriented Development in urban areas emerges as a key driver for stimulating housing demand and potentially impacting residential prices. This emphasis aligns with the broader vision of creating well-connected and sustainable urban spaces.
The impact on the hospitality sector is evident through the development of iconic tourist centers and the proposal of long-term loans to states for tourism. This move is expected to benefit hotels and restaurants across categories, influencing real estate dynamics in these areas.
The decision to extend tax benefits to startups for another year is poised to inject new life into the office real estate sector. Additionally, the Rooftop Solar Project, providing 300 units of free electricity, aligns with sustainability goals and introduces a new dimension to real estate, promoting green buildings.
However, amidst these positive highlights, certain key expectations remain unmet. The persistent demand for industry status by the real estate sector, which could unlock benefits like easier access to credit, tax breaks, and infrastructure development, remains unaddressed. Likewise, expectations for tax incentives for homebuyers, including an increase in the deduction limit on home loan interest under Section 24, were left unfulfilled. The absence of major announcements regarding increased allocations for schemes like PMAY (Urban) is also notable, leaving a void in efforts to enhance affordability and stimulate new projects in the affordable housing segment.
While the Interim Budget doesn't offer immediate solutions to all industry concerns, hope remains for the upcoming Union Budget to introduce comprehensive measures. Until then, the real estate sector navigates a path of cautious optimism, where promising developments fueled by infrastructure advancements and strategic initiatives coexist with unmet expectations, urging further policy interventions for a truly thriving future.