How Union Budget 2024-25 Will Affect Real Estate Developers
The Union Budget 2024-25 has introduced several measures that can impact the real estate sector in India. The budget presents both opportunities and challenges for real estate developers. The main focus of the real estate budget 2024 is on boosting affordable housing, infrastructure development, and improving overall economic stability.
The finance minister also announced significant things related to taxation, incentives for affordable housing, and increased investments in urban infrastructure.
Let’s read this blog to find out how the real estate budget could affect real estate developers and the potential changes in market dynamics.
Union Budget 2024-25 capital expenditure for infrastructure development
Union Budget 2024-25 maintained the capital expenditure allocated for infrastructure development at Rs 11.11 lakh crore. This comprises 3.4 percent of the GDP. The budget also has several road connectivity projects. In addition to this, a significant budget has been allocated to rural infrastructure development that will boost the growth in the real estate sector.
Let’s check the detailed overview of the measures that are announced in the budget and their impact on the real sector.
Opening of new airports, expressways, and medical schools
In the Union Budget 2024–2025, the country’s infrastructure development and expansion were a major emphasis. Some of the important projects include the Patna-Purnea Expressway, Buxar-Bhagalpur Expressway, spurs to Bodhgaya, Rajgir, Vaishali, and Darbhanga, and an extra two-lane bridge over the Ganga at Buxar. A total investment of Rs 26,000 crore has been allocated for this.
- In addition to this, Rs 2.66 lakh crore has been set aside for infrastructure and rural development.
- A focus on improving connectivity and infrastructure could lead to a boom in the real estate market that opens up opportunities for more real estate developers.
Urban development of cities of growth hub
The government will assist in the development of cities as “Growth hubs” while partnering with the states. This will involve using town-planning schemes and transportation planning to create peri-urban areas.
Real estate developers might profit from the emergence of growth centers as this gives a framework for urban development.
Transit-oriented development for cities
The union budget also announced plans for Transit-Oriented Development (TOD) for 14 cities. This development will be for the cities that have a population above 30 lakh. It is mainly a development model that is applied for both micro and macro levels.
- This TOD aims to ensure sustainable living by building mixed-use communities around transit hubs for easy accessibility.
- As per the real estate experts, the development of the TOD model across cities will give rise to residential pockets. This will ultimately provide developers with a scope for their growth.
Industrial Parks
The government is also going to facilitate the development of investment-ready “plug and play” industrial parks. This will complete infrastructure in or near 100 cities to foster industrial growth and attract investments.
These industrial parks will provide businesses with ready-to-use amenities, cutting down on costs and operating times. The strategic placement of these parks will optimize economic advantages, hence increasing real estate activity and development. This industrial park development has a positive impact on the budget on real estate in India.
Emphasis on spiritual tourism
The government is developing several key tourism destinations because there is a huge potential of spiritual tourism as a prime economic driver. A few cities and places that will be developed as spiritual tourism are:
- Nalanda
- Vishnupad and Mahabodhi temple corridors
- Odisha
So, this development of spiritual corridors and tourism can be a new real estate growth factor in the surrounding regions. Because of this, there will be more residential and commercial investments.
As there will be more tourists, the demand for hotels and retail spaces will also increase. A boost in the local economies leads to increased property values in the area further driving growth in the real estate market.
What Developers Are Saying
Reputed developers such as Godrej Properties and DLF have stated that enhanced infrastructure expenditure will improve real estate demand especially in tier 2 and tier 3 cities. They also have expressed optimism about the budget’s core focus on infrastructure.
Prestige Group and Oberoi Realty developers also welcomed the continued focus on affordable housing. They stated that it will align with the market demand and help bridge the housing gap.
The incentives for sustainable development announced in the real estate budget 2024 have been well received by some developers such as Tata Realty. Developers who are looking to attract eco-conscious buyers are appreciating the government’s push for green infrastructure.
Developers such as Brigade Group have highlighted the push for rental housing as a good move that could help diversify their portfolios. It can also cater to the growing urban population.
However, some developers have raised concerns about changes in tax policies, particularly around capital gains.
Conclusion
So, that was it! The Union Budget has announced a neutral roadmap for developers as well as homebuyers. Union budget 2024 real estate has announced several changes and launches that will lead to a promising growth outlook. The budget’s focus on urban planning and sustainable growth may benefit both developers and homeowners.