As the Finance Ministry gears up to unveil the Interim Budget 2024, the real estate business in India is holding high hopes for substantial reforms and support. In 2023, India’s real estate, a key economic driver, faced challenges, notably in affordable housing. In this blog post, we explore the expectations of the real estate business from the upcoming budget, the factors contributing to the decline in affordable housing, and the anticipated positive trajectory for the real estate market in 2024.
Expectations from the Interim Budget 2024:
Maximum Deduction for Home Loans (u/s 24):
Real estate business urges raising the Section 24 tax rebate on home loan interest rates from ₹ 2 lakh to at least ₹ 5 lakh. The proposed tax rebate increase aims to revive demand in the budget homes segment, hit by the pandemic-induced decline.
Decisive Boost for Affordable Housing:
Affected by the pandemic, the affordable housing segment within the real estate business has witnessed a substantial drop in sales. The sector urges adjusting affordable housing qualifying costs in cities, seeking a boost in demand. This adjustment is crucial for making affordable homes accessible to a broader audience.
Release Government Land for Affordable Housing:
To alleviate the land shortage for affordable housing, the real estate business proposes releasing government-owned lands at reduced costs. This includes lands owned by entities like Indian Railways and Port Trusts. This strategic move is expected to significantly contribute to lowering overall real estate prices.
Real Estate Business Overview and Opportunities:
The real estate business in India has been evolving rapidly, driven by urbanization and rising incomes. Investors consider this sector an attractive investment option due to India’s position as one of the fastest-growing economies globally. Opportunities span various segments, including office spaces, logistics, private credit, residential properties, and data centers.
Analysts anticipate a rebound in 2024, fueled by pent-up demand and optimistic market conditions within the real estate business. Concorde’s report projects a 9.2% CAGR in India’s real estate from 2023 to 2028, emphasizing long-term investment potential. This optimistic outlook positions the sector as an attractive option for investors, signaling sustained growth over the specified period.
Home Loan Rate Projections for 2024:
Projections indicate stable home loan rates in the real estate sector for 2024, fostering affordability and steady demand. Affordability and the income outlook for potential purchasers will critically influence residential sales. Additionally, the anticipated repo rate cut is expected to keep home prices within an affordable range for buyers.
Expert Views on Sustainable Growth:
Experts emphasize the importance of government prioritization of affordable housing schemes and incentives for banks to offer lower interest rates, especially for first-time buyers within the real estate business. This approach is crucial for achieving organic and sustainable expansion in the residential market, ensuring a balanced and inclusive growth trajectory.
Focusing on affordability, sustainable growth, and strategic financial measures, the real estate business in India is set for positive developments in 2024. The real estate industry eagerly anticipates the upcoming Interim Budget as it holds the potential to propel continued growth in the sector, providing crucial impetus for both homebuyers and investors. The budget’s potential to offer opportunities for all stakeholders makes it a highly awaited event in shaping the trajectory of the real estate business in the coming year. Stay tuned for updates on the evolving landscape of India’s real estate market.