The real estate sector has seen supportive measures like allowing restructuring of loans, reducing risk weights for commercial real estate, public sector banksโ cutting home-loan rates in the sub โ Rs 0.5 million and Rs 0.5 million โ 2 million brackets and relaxing ECB norms for township projects. Also, the continuing thrust by the government under its โHousing-for-all programmeโ and its emphasis on affordable housing would see more measures to boost the sector. Companies across the board would be positively affected; DLF, Unitech, HDIL would be key beneficiaries.
Expectations
Industry
* Exemption ceiling of interest paid for housing loans to be raised from Rs 0.15 million to Rs 0.3 million.
* Greater thrust on PPP projects in housing (e.g., rental housing)
* Housing as a priority sector (increasing limit to Rs 3 million to from Rs 2 million now)
* Reducing/exempting of service tax on rental income of commercial property (currently 12.36 per cent).
Affordable housing
* Re-introduction of Sec 80 I (B) for affordable housing
* Exempting building materials and services from excise, customs and service taxes.
* Extra FSI for such projects
Impact on the sector
Increasing the amount of tax relief on home-loan-interest payments and lower interest rates would benefit home buyers as well as the industry. Incentives for affordable housing and more PPP projects would render such projects viable for developers, thus addressing the housing shortage.
Companies affected
All budget measures would be beneficial to the property sector since most companies are focused on the residential segment.
Companies already leaning towards affordable housing (with the bulk of under-construction projects and planned projects skewed towards affordable housing) would be immediate beneficiaries. Unitech and DLF would be key beneficiaries.
PPP projects such as rental housing schemes would benefit companies with land in and around densely populated metropolises such as Mumbai, Delhi, Kolkatta, etc. Such schemes would be more positive for DLF, Unitech, HDIL, Akruti City, etc.
(The report has been prepared by Samar Sarda).