Real estate businesses have high expectations from the forthcoming Union Budget 2012, anticipating practical provisions that will reduce effective price barriers for home-seekers.
Anil Pharande, Vice-president of Credai (Confederation of Real Estate Developers Associations of India) Pune Metro, suggested that on a macro level, a higher allocation of infrastructure funds for housing could be a favorable approach. "The government can set clear guidelines on timely commencement and completion of projects and link disbursement of these funds with adherence to these guidelines."
Pharande also emphasized the importance of removing the 10 per cent service tax on residential real estate construction, which increases the cost of new homes by as much as 3 per cent. This is particularly crucial for a cost-sensitive market like Pune, which largely consists of the lower mid-income segment.
Real estate developers have voiced the need for broader incentives to promote the development of affordable housing. These incentives could encourage more developers to become active in this important sector and increase the supply of budget homes in the city. The city continues to face challenges such as high lending rates, construction costs, insufficient infrastructure, and a lack of affordable housing.
Additionally, a 1 per cent interest rate subsidy on home loans could be a beneficial measure to enhance affordability. Pharande also proposed raising the present eligibility limit of loan amounts from Rs 20 lakh to Rs 30 lakh, which would help people consider buying apartments of decent sizes. Reducing taxes such as excise VAT and stamp duty on real estate will also make home purchases more attractive and feasible, Pharande remarked.