Two days ahead of the Budget, real estate developers are hoping that the government would rationalise the Goods and Services Tax (GST) slab for under-construction properties, announce incentives for affordable housing, and much more. So, what does the finance minister have up his sleeve in the run up to the General Elections?
To get an industry perspective, we spoke to Amit Ruparel, Managing Director of Ruparel Realty. In an exclusive interview with RoofandFloor, he talked about his Budget wishlist for the real estate sector, GST rationalisation, and the trends that are likely to define the market in the coming months.
Here are the excerpts.
Tell us about your expectations from the upcoming Budget 2019.
Last year, the sector faced the tight spot of credit squeeze at various intervals. While the consumer sentiments turned positive when the government introduced subsidy (CLSS) for home loans under PMAY, the atmosphere of uncertainty was recreated with the increase in stamp duty. Hence, the upcoming Union Budget should be in favour of both homebuyers and developers. It should address the long-pending demand for ‘industry status’ as it will help the industry overcome the negative perception.
Furthermore, it will be an ideal situation if the GST is revised for real estate to make it more attractive and affordable. Even though the government has been showing signs of considering the proposal, nothing is approved yet.
Getting timely approvals remain one of the biggest challenges for real estate developers. Thus, a single window clearance will help swiftly execute projects and avoid unnecessary delays.
Over the last year, what has impacted the real estate sector in a positive way?
Over the last year, the government has announced several reforms to boost affordable housing. The latest one being the Mumbai Development Plan 2034. Schemes such as increasing carpet area of residential units for interest subsidy under credit-linked subsidy scheme (CLSS), opening up of no development zones (NDZ), and salt pans are strengthening the overall industry.
Do you think the Finance Minister will grant Industry Status to real estate this year?
We are hopeful that the finance minister will grant industry status to the real estate sector. It will ensure easier access to institutional credit and help in reducing the cost of borrowing for affordable projects. Consequently, the approval processes will be reduced and there will be increased transparency in the sector.
What about GST rate? Will it be revised?
It will be an ideal situation if the GST rate is revised for the real estate to make it more attractive and affordable. Even though the government has been showing signs of considering the proposal, nothing is approved yet.
What are the top three trends that are likely to define the sector in 2019?
With many domestic and foreign investors eyeing the Indian real estate market, we expect positive trends like:
• Huge investments by global investors
• Revamping of business models
• Market consolidation that will wash out the bad elements from the sector