We foresee a friendly budget this time: Himanshu Kanakia, MD, Kanakia Spaces

Accommodation Times News Service
The Real Estate industry has witnessed several positive movements in 2016. Real Estate sector contributes close to 12 – 15% of the GDP and is connected to many ancillary industries. The budget is a precursor for the year and a platform to announce policies. However, apart from the budget, the government’s initiatives like demonetization and reduced interest rates are positive developments which will benefit the sector largely. We are optimistic that the upcoming budget will address the issue of the much-needed reality reforms.

Already announced demonetization has been one of the wise choices but post this announcement, the realty sector expects a friendly budget for the industry. We expect real estate to be given an industry status coupled with seeing more transparency in the working of the realty sector after RERA’s implementation. This will improve the buyers sentiment and encourage them to invest in real estate. Government’s move on rate and upcoming budget will hopefully lower the interest rates further.Not only this, RERA’s implementation will have an indirect impact on the new launches as they are expected to decline which will have a direct impact on high sales of already existing inventories. RERA will accelerate consolidation of industry and will result in decreased supply. Business will move from unorganized small sector to organized big players.

In 2017 the focus of Indian real estate will largely be on affordable housing to give momentum to the ongoing sales in the market. Recent amendments in the Real Estate Investment Trusts (REITs) have resulted in growth reason being easier access to capital for faster project completion. Largely, those staying in rental accommodation will benefit with affordable housing getting a push from the government from time to time with policy changes.

This rationalization of the tax regime for REITs in Budget 2016-17 will help make it a reality.

We expect that government will focus on the issue of land costs being high. Lowering down the costs for land acquisition will boost many private players. If the government does so, there will be many new launches and quick delivery of projects by the private players.

In 2016, for affordable home segment, government had already cut the interest rates but government need to also drive their attention to the housing segment with the ticket size of 1 cr and above, especially the luxury segment.

All in all, we foresee a friendly budget this time.

-By Himanshu Kanakia, Managing Director, Kanakia Spaces


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