Budget 2015-16 affects on real estate sector

Q: How Budget 2015-16 affects real estate sector?

Dayananda, Mumbai

20th May 2015

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Replies (8)

It is very crucial to understand that "Housing for all by 2022" is a bigger term than what is being understood by the common public. There is lot more to it than just providing houses to everyone. The government has planned to not only build more houses, but to redevelop slums, decrease interest for poor section, involving private sector and also aid urban poor for renovating the existing homes.

Rajatrawal, Mumbai

23rd June 2015

Comment

Hello Friends,
It is really a good news as it will increasing the standards of living by giving proper homes and subsidised interest rates to EWS and LIG groups will not only aid in fulfilment of their social needs but also help everybody associated with the real estate sector. We are happy with this decision and welcome it wholeheartedly.

Vatsa Suman, Pune

23rd June 2015

Comment

@Vatsa,
According to me, this move has to be regarded as a milestone for the housing sector as every stakeholder of the industry is sure to get benefited. Currently, taking 10.50% as an average interest rate on housing loan, EMI on admissible loan value of Rs. 6 lakh for a15 year loan duration comes out to be Rs. 6632 for each month. Now with the cabinet approving on the credit linked subsidy to 6.50%, the monthly EMIs come down to Rs. 4050 thereby, offering a saving of Rs. 2582/month.

Bikram, Mumbai

23rd June 2015

Hi everybody,
A path breaking news for the Indian housing sector as the cabinet has approved launch of "Housing for all by 2022" programme, which is primarily aimed at rehabilitation of slum dwellers and promotion of affordable housing for the Economically Weaker Sections (EWS) and Lower Income Groups (LIG), through credit linked subsidy.

Padma G, Mumbai

23rd June 2015

Comment

Yes Padma,
I heard the news and appreciate the government's initiatives. A support of Rs. 1 lakh to Rs. 2.30 lakh per beneficiary would be provided under different components of the National Urban Housing Mission (NUHM) in urban areas to build 2 crore houses to meet the housing shortage, over the next 7 years.

Devesh Kumar, Ahmedabad

23rd June 2015

@Devesh,
Then you must know that this initiative will help in many ways to the people like releasing of inexpensive land parcels, land acquisition to become easy, interest rates to be dropped, raw materials to cost less and other such steps will make sure that developers are provoked to construct houses coming under affordable segment and target audience to be EWS and LIG groups primarily.

Padma G, Mumbai

23rd June 2015

Right padma,
Almost 30% of our country's population falling under LIG and EWS groups, the current price trend in Indian real estate cannot be afforded by them. Thus, schemes like these are major incentives for this section of the society along with development of affordable homes.

Devesh Kumar, Ahmedabad

23rd June 2015

Actually, their ministers are busy in celebrating their 1st year anniversary programmes. Govt. is just waiting for PM to give time for the final launch. After all it's a very big initiative so it would have a proper launch. The effort which was earlier planned as Sardar Patel Mission would now be named to honor 75 years of Independence.

Samrat,

28th May 2015

Comment

Right Samrat,
And they are planning to include all existing schemes such as Rajiv Awas Yojana and Rajiv Rinn Yojana Ministry of Housing and Urban Poverty Alleviation and rural development ministry under this scheme. One of the main elements of the mission would be slum redevelopment.

Chintakpujara, Mumbai

28th May 2015

Cheer Guys,
The government is getting ready to launch PM Narendra Modi's most committed scheme "Housing for all by 2022". Mr. PM is likely to launch the scheme as an umbrella mission, recounting all affordable housing schemes and slum redevelopment projects. And it is expected to be launched by mid of the June'2015.

Chintakpujara, Mumbai

28th May 2015

Comment

I think it's time to cheer whole India. Have the urban development and rural development ministries finalized their respective elements for providing 6 lakh houses?

Miraniyatin, Mumbai

28th May 2015

Yes, you are right.
Both the Urban as well as Rural Development Ministries have finalized their specific elements for providing 6 lakh houses, 2 lakh in Urban areas and 4 lakh in rural areas.

Chintakpujara, Mumbai

28th May 2015

Hi all,
Budget 2015-16 creates a lot of question in my mind and service tax is one of those question. Will increase service tax affect the price of properties?

Shalini Parikh, Mumbai

21st May 2015

Comment

Hello Shalini,
This is one move which has attracted a lot of flak from the real estate sector, mainly as the real estate sector was hoping from a break from the rising costs. With proposed hike in service tax to 14%, it is going to further affect the price of properties, which can lead to a further down fall in the realty market..

Vinay Sharma, Pune

21st May 2015

The whole realty followers are saying that there is nothing in budget 2015-16 for the real estate. And if one looks closely at the steps taken by the government, one can easily understand that each and every step is taken with an intention to make housing easy and affordable.

Shalini Parikh, Mumbai

21st May 2015

Hi everybody,
How will announcement of a relatively less constricting REIT regime and favorable tax transparency help the realty sector?

Keshavrao Jedhe, Pune

20th May 2015

Comment

Well Keshav,
This is one policy which can have a brilliant effect, not only on the REIT sector in the new market, but also on the real estate market as a whole, particularly as it presents real estate developers with excellent opportunities to exit the market at the right time and to generate income from their real estate assets.

Anuskha Chandan, Mumbai

20th May 2015

Hi Dayananda,
The entire budget did not have much related to real estate. However, some positive signs were housing for all by 2022 and some policy announcements regarding REITs. There is no two ways about it that a cut in home loan interest rates is the best and the most effective way of boosting property sales and to offset the slowness faced by the real estate sector, and the repo rate cut was sure an indication of right idea.

Manisbapu, Mumbai

20th May 2015

Comment

Hi Daya,
The budget 2015-16 may affects in several ways like Housing for all by 2022, positive impact on loan to value ratio-Inclusion of stamp duty, registration and documentation charges in the cost of houses by banks, announcement of a relatively less constricting REIT regime and favorable tax transparency status and increase in service tax is going to further affect the price of properties.

Ravindra Singh,

20th May 2015

Thanks Ravindra,
But can you tell me how "Housing for all by 2022" affects the real estate market?

Anand M, Bangalore

20th May 2015

@Anand,
As the Modi government has announced Housing for all by 2022 which aims to provide 6 crore units of urban and rural housing to needful citizens. If the sign given by government is anything to go by, then the right steps would mean a huge boost to the affordable housing segment of Indian real estate sector.

Arpit, Delhi-NCR

20th May 2015

My last question to Arpit,
What did RBI do to improve the purchasing ability of buyers? How it will help the lower income group to buy their own house?

Anand M, Bangalore

20th May 2015

@Anand,
Recently, RBI allowed financial institutions to include stamp duty, registration and documentation charge to the cost of the house. This simple, yet effective move will have a positive impact on the LTV (loan to value) ratio, which unexpectedly will help more individuals in the lower income group to buy their own homes. This policy, at present, is announced for properties that do not cost more than 10 lakhs, including these charges.

Arpit, Delhi-NCR

20th May 2015