The period, before the presentation of Budget 2013, was a period of expectations and promises. However most of the promises to the real estate sector were not included in the Budget 2013.
Real estate sector had ‘invested’ a lot of hopes on the Union Budget 2013. The construction sector expected that the sector would be given infrastructure status and so many others like this. Budget 2013 also was expected and predicted to a real estate friendly one.
Setting up of a real estate regulatory authority was another important thing which the real estate sector waited for. However the regulatory bill also did not see light.
Commenting on the Budget 2013, Anuj Puri said that it was not as realistic as it was expected to be. Jones Lang LaSalle India Chairman added that the budget is moderate to all other sectors while it remained tepid to the real estate sector.
The only positive thing that will be boosting the real estate sector will be the deduction of Rs.1 lakh from the interest rates of home loans up to Rs.25 lakh. However the deduction will be applicable only to the first-time home buyers. So it will not be helping those who plan to buy resale properties.
The deduction, however, will boost the real estate construction as there will be more demand for the new launches. The builders will now have to come up with new projects and it will necessitate the growth of other real estate-related industries like cement, bricks, and so on.
Mr. Puri opined that the deduction will improve housing demand only in the tier-2 and tier-3 cities and not in the metros and the major cities.
The real estate players are also worried about the luxury and top-end segment. As there is an additional tax levied on the top-earners, luxury housing segment may be affected inversely.
The real estate sector may have to satisfy with the Union Budget 2013 which did not include any higher level of boost to the sector as expected.
