The Union government's focus on affordable housing welcomed by the real estate sector

The government's focus on affordable housing and infrastructure boost was much appreciated by the real estate sector.

Sushil Mohta, Chairman, Merlin Group and Ex - President, Credai - Bengal welcomed the Union government’s decision to incentivise affordable housing by providing additional deduction of Rs 1.5 lakh above Rs 2 lakh for interest paid on loan taken for purchase of residential house having value upto 45 lakh.

However, he said that it should have been better if the upper limit is Rs 60 lakh for tier one city.

"This will boost the real estate market and encourage middle income class buyers," he said. "Also the government's decision to provide unutilized land for affordable housing through PPP model will spur the growth of real estate market . In West Bengal, there are unutilized lands of Port and Railway which can be used for the development of affordable housing segment. The circle rate by the state government needed to be rationalised for this to be successful as the circle rate normally is high. The incentivisation will witness increase in demand for affordable segment."

Speaking about incentives offered to the real estate sector, Niranjan Hiranandani President NAREDCO & Managing Director of Hiranandani group, also welcomed the focus on rental housing and housing for all by the year 2022.

“The government’s idea to provide affordable housing will be a possibility and is highly successful in almost all the cities except Mumbai where there is a paucity of land. I believe that the additional incentive of Rs 1.5 lakh on interest on loans borrowed under the affordable housing would give a boost to the real estate sector further,” he said.

While Anuj Puri, Chairman, Anarock Property Consultants, reiterated the general sentiment that the overall Union Budget 2019-20 is a balanced one with more of a long-term vision as a follow-on of the Interim Budget, he also pointed out that as far as real estate is concerned, the budget had a few hits and several misses.

He said that while affordable housing and infrastructure got a shot in the arm and there will be more focus on rental housing and student housing, "the all-important ‘industry status’ remained elusive, taxes were not sufficiently moderated and land reforms were not mentioned at all."

"We may not see consumers and investors return to the market in sufficient numbers - barring in affordable housing.," said Puri.

In fact, on Friday, realty stocks were down despite the focus on affordable housing, according to media reports.