The real estate market in India was able to recover quickly from the pandemic, steered primarily by renewed buyer confidence, reduced interest rates & stamp duty and friendly home loan policies.
The sector looks to the Union Budget 2022-23 for progressive policies that will continue to boost demand, usher in an era of transparency and bring in cost efficiencies for all its stakeholders. Measures to Boost Demand The real estate sector recorded a quick recovery to near pre-COVID levels with the residential segment outperforming the others. The housing segment is set to gain further momentum in 2022 for which it expects the government to introduce extended tax exemptions, reduced stamp duties, rational tax concessions, and hike in tax rebate and higher relief on home loan rates.
Another aspect that policymakers should pay attention to is increasing the ceiling of affordable housing to Rs 50-60 lakh.
At present, the very definition of 'affordable housing' needs to be adjusted as standardised pricing set by the government for this segment (Rs 45 and below for carpet area 90 sq m or below) may not work for many cities across India.
Also Read: Budget 2022: 4 key reforms real estate industry expects from govt Measures to Aid Developers Another key expectation from the government is to fulfil the long-standing demand of awarding 'Industry' status to the real estate sector.
Giving industry status to real estate will help developers' access loans at subsidised rates and the opportunity to raise funds from foreign investments.
The real estate sector also seeks the government's aid in completing stalled and stressed projects, in addition to cheaper credit facilities, input tax GST credit for developers, reduction in income tax for higher capital gains, and nationwide reduction in stamp duty and registration charges. One of the most important asks is rationalising GST on raw materials as developers face prohibitive construction costs. Also, allowing Input Tax Credit (ITC) for work contracts and construction activities will help the developers overcome their ongoing financial burden and stress.
Measure to support and encourage PropTech startups PropTech has transformed the homebuying journey; virtual site visits enabled by 3D/VR to property and data management through AI and Machine Learning, and sales automation via CRM have become key to creating seamless customer experiences and bringing in cost and process efficiencies across the value chain.
To sustain this growth, we expect bold policy interventions to strengthen digital infrastructure and encourage digital adoption.
Also, to further solve the transparency and accountability issues in the sector, the government should also look towards linking RERA and IGR data.
Also Read: Budget Expectations: Real estate sector seeks relaxation in taxes
Readily available purchase and livability data will help restore consumers' trust and improve property buyers' confidence.
There is also an urgent need to adopt BlockChain technology for the implementation of the Land Titling system.
This will help overcome the issues of accountability, incoherent data sets with different government departments on the same piece of land and delays in the current Land Records Management Process. The government should also address the growing importance of 5G connectivity for the horizontal implementation of technology across all sectors. Although a relatively new field, proptech startups have already successfully raised $9.5 billion worldwide in 2021. In India alone, proptech saw a $551 million investment in 2020.
India has the potential of becoming the forerunner in the proptech market. To fastrack the growth in this real estate segment, the government should expand opportunities for new startups and lend support to them in the form of longer-term tax exemptions and funding support.
Indian Real Estate has always been a vital engine for the country's economic growth. The sector seeks pivotal decisions and substantial benefits from Union Budget 2022 for all its stakeholders. (The author is Managing Director, Sell.do.)