Budget 2024: New Scheme to Boost Housing Demand

New Delhi, Feb 1 (PTI) The government's announcement in the Budget to launch a scheme to help middle-class people buy or build homes will boost demand for residential properties and help in the overall growth of the real estate sector, according to property developers and consultants.

In the interim Budget for 2024-25, Finance Minister Nirmala Sitharaman announced that the government will launch a scheme to help deserving sections of the middle class 'living in rented houses, or slums, or chawls and unauthorised colonies' to buy or build their own houses. She also said 2 crore more homes will be built for the rural poor in the next five years under the continuing PM Awas Yojana (Grameen).

Commenting on the Budget proposals, CREDAI President Boman Irani said these initiatives are "encouraging and will aid in the growth of the housing market".

Sustained focus on infrastructure development will further boost growth in the housing sector, he said.

"However, as the tax rates remain unchanged, the common man will not have additional money in his pocket, which may be a deterrent on the spending capacity of taxpayers," Irani said.

NAREDCO President G Hari Babu said, the government's commitment to housing development through the Pradhan Mantri Awas Yojana - Grameen is laudable.

"Further, the reiteration of a new scheme for the urban middle-class population also would boost the confidence of both the common man and the real estate sector. We now look forward to a clear roadmap of this scheme," he said.

Shapoorji Pallonji Real Estate MD & CEO Venkatesh Gopalakrishnan acknowledged the government's efforts but demanded "targeted measures in the upcoming Union Budget to unlock the sector's full potential".

He sought an increase in the deduction on interest on home loans from Rs 2 lakh to Rs 5 lakh annually to incentivise homebuyers and also boost industry revenue.

Sanjay Dutt, MD & CEO, Tata Realty and Infrastructure Limited: "As they say, sometimes even no news is good news! Expectations are always high and perhaps this is the first budget by the current government when there is nothing specifically announced for the real estate sector".

"The high points still remain the increased capex and emphasis on affordable housing. I am hopeful and looking forward to the budget 2024-25 in the coming months for the big picture," he said.

Godrej Properties MD and CEO Gaurav Pandey said the measures for stronger urban and sustainable development will have a positive bearing on the domestic real estate landscape in the long run.

Among NCR developers, Gaurs Group CMD Manoj Gaur said the new scheme for the middle class will benefit the real estate sector. Migsun Group MD Yash Miglani said the focus on infrastructure development will help the real estate sector.

Krisumi Corporation MD Mohit Jain said the launching of a new housing scheme, especially focused on the middle class bodes well for the housing sector. "It is likely to boost demand for mid and affordable-segment homes."

Noida-based Hawelia Group founder and Chairman Rattan Hawelia said, "The larger home needs are for middle-income group Citizens and there is a scarcity of affordable homes across the nation".

"It has been a disappointing budget for the Housing sector as no remarkable announcement for introduction of subsidiary schemes or deduction benefits of home loan interest have been made, which generally acts as stimulants for home buying," he said.

Among property consultants, Housing.com CEO Dhruv Agarwala said the soon-to-be-launched housing scheme for the middle class is poised to be a significant boost to the housing sector in a country where an increasing number of people are entering this income category each day.

"Industry estimates suggest that India's middle class is set to nearly double to 61 per cent of the total population by 2047, up from 31 per cent in 2020-21," he said.

Anarock Chairman Anuj Puri said, "As anticipated, the Interim Budget made no big-bang announcements, but it continued its focus on infrastructure upgrades and building connectivity across the country. This will benefit real estate growth in not just the top cities but in Tier 2 and 3 cities across the country".

The housing scheme for the middle class is likely to free encroachment areas like slums for easier redevelopment, he added.

Piyush Bothra, co-founder and CFO of Square Yards said the government's announcement regarding the construction of an additional 20 million homes under the Pradhan Mantri Awas Yojana- Rural (PMAY) underscores its commitment to promoting inclusivity and ensuring ample living accommodations for all.

Furthermore, he said the pledge to introduce a housing scheme for middle class
will help in fulfilling their dreams.

Knight Frank India CMD Shishir Baijal said the proposed boost to housing for the middle-class living in sub-par accommodation is a welcome inclusion. "We look forward to the details of this as we expect this to have great long-term ramifications."

Vestian CEO Shrinivas Rao said the increase in infrastructure outlay by 11.1 per cent to Rs 11.11 lakh crore will indirectly infuse growth in the real estate sector.

Amit Mishra, co-founder of 91Squarefeet, said the announcement of constructing 2 crore more houses under PM Awas Yojna heralds a new era of growth, benefiting not only real estate developers but also financial institutions.

Shiwang Suraj, Director and founder of InfraMantra, said the announcement related to the middle class will boost housing demand.