As the Union Budget for 2024-25 approaches its unveiling on July 23, the Indian real estate sector is optimistic about the Modi 3.0 government's potential support. There is a strong anticipation for tax benefits and other measures that could enhance market sentiment. The real estate industry, a significant source of employment, also looks forward to infrastructure enhancements that could elevate urban living standards.
Real estate consultancy firm Anarock has expressed its hopes for the budget, asking, "Will the government finally grant industry status to the entire housing sector? Will it implement concrete steps to revitalize the affordable housing market, which has been struggling since the pandemic?" Anarock reports that the Indian housing market has been robust in 2024, with sales and new launches reaching record highs in the top seven cities. Sales soared to about 4.93 lakh units in 2023-24, with 4.47 lakh units launched.
Anuj Puri, chairman of ANAROCK Group, emphasized the need for continued growth, noting that the current trend favors mid-range and premium housing. He cautioned, "This growth cannot be sustained solely by high-priced homes while affordable housing suffers." ANAROCK Research highlights a significant decline in affordable housing sales post-COVID, from over 26% in 2022 and 38% in 2019 to about 20% in Q1 2024. The segment's share of overall housing supply also dropped to 18% in Q1 2024, from nearly 40% in 2019.
Puri advocated for tax breaks to revitalize affordable housing, both for developers and buyers. Anarock also recommended reviving the Credit-linked Subsidy Scheme under PMAY and reintroducing a 100% tax holiday for affordable housing developers. Additionally, they suggested adjusting the definition of affordable housing to expand deduction benefits.
Anarock stressed the need to revise the pricing within the affordable housing segment, considering city-specific market dynamics. For instance, in Mumbai, the budget limit should be raised to at least INR 85 lakh. They also reiterated the long-standing demand for granting infrastructure status to the real estate sector, which would facilitate easier access to funds and streamline regulatory processes.
The upcoming budget presentation by Finance Minister Nirmala Sitharaman on July 23 will mark her sixth, surpassing the record set by former Prime Minister Morarji Desai. The budget session of Parliament is scheduled from July 22 to August 12.
