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It has been strangely characteristic for the real estate and construction industry in India to remain unregulated and unrecognized, even though it is one of the largest employers and contributors to national growth.
Main header for views section
It has been strangely characteristic for the real estate and construction industry in India to remain unregulated and unrecognized, even though it is one of the largest employers and contributors to national growth.
It is a highly disappointing budget. The Finance Minister has miserably failed in highlighting the importance the role of Housing in economy, employment generation, apart from the very need of housing. The announcements on ECB for affordable housing is a minor respite but still meaningless.
“For the real estate and housing sector, this years’ budget has exceeded expectations given the pressure on fiscal situation. Most importantly, it has taken into account the crying need to focus on affordable housing sector by allowing ECB for low cost housing, road as well as construction. Withholding tax on ECBs for affordable housing has been reduced from 20% to 5% for 3 years and this move will help ease the liquidity in the sector.
Our reaction to Union Budget 2012-13 is mixed at best. It seems fair to state that the Indian real estate sector does not have much to cheer about.
The recently tabled Land Acquisition, Rehabilitation & Resettlement Bill, 2011 in Parliament is meant to replace the 117-year-old Land Acquisition Bill of 1894.
In contrast to what was been witnessed in many of the more volatile cities over the last couple of years, Chennai’s residential property market saw steady growth in terms of pricing, demand and supply. Chennai’s residential property market is predominantly end user driven, and this fact did a lot to sustain consistent absorption throughout 2011.
The office market is likely to observe steady demand, especially in prime locations in leading cities like NCR, Mumbai and Bengaluru.
Residential property buyer sentiments in Hyderabad have improved considerably over the last three quarters. There has been a gradual but certain increase in residential demand and absorption. That said, the market is still a long way from touching the 2007- 2008 levels.
Replicating global trends, the Indian economy is looking towards an impending slowdown in growth due to decline in consumption expenditure, repeated hikes in interest rates and consistently high inflation.
What Government can look at is to increase the demand and continue interest reduction in housing or enhance the deduction limit. Government can also provide special tax incentives for budget housing.