Union Budget 2025: Real Estate Players Eye Reforms to Boost Housing Demand
Real estate players are optimistic that the Union Budget 2025 will introduce more reforms to enhance housing demand. Key demands include improved housing finance, tax reforms, and faster project clearances.
Real EstateHousing DemandUnion Budget 2025Tax ReformsInfrastructure DevelopmentReal Estate MaharashtraJan 11, 2025
They are looking for improved availability of housing finance and further tax reforms, including a reduction in GST, to make housing more affordable.
Additionally, there is a hope that the government will focus on the commercial real estate segment as well.
Increasing the interest amount limit for home loans under tax exemption from the present amount of Rs 2 lakh to at least Rs 5 lakh would make a significant difference, especially for middle-income homebuyers.
This would benefit the housing sector as more people would be motivated to buy houses.
Improving the availability of real estate finance and introducing GST input credits could also help reduce the cost of owning a house, which is crucial given the annual urban housing prices inflation of about 6-8 per cent, as pointed out by Harshvardhan Tibrewala, MD of Vida Realty.
Real estate players are also expecting the government to allocate at least Rs 10 lakh crore for infrastructure development, as part of the Rs 100 lakh crore investment plan over five years.
This allocation will enhance connectivity and create new growth corridors across the country.
The Indian real estate sector is poised for significant growth.
According to a joint report by EY and CREDAI, it is projected to exceed $4.8 trillion by 2047, contributing 18 per cent to the projected $26 trillion GDP.
In 2024, the sector showed remarkable growth, with Mumbai city alone experiencing an 11 per cent increase in housing sales.
“We expect the budget 2025 to introduce measures that will further strengthen the real estate industry.
Increasing tax slabs, particularly for individuals earning Rs 12-15 lakh annually, will enable more citizens to invest in home ownership.
Additionally, revising tax regulations for developers and stabilizing raw material prices will help manage construction costs and maintain housing affordability.
These initiatives will not only boost the real estate sector but also contribute to India’s broader economic and housing goals, fostering sustainable growth nationwide,” explained Manju Yagnik, Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO-Maharashtra.
Faster clearance and smoother sanctioning of projects is another key demand from real estate players to help fast-track commercial real estate projects.
“One major improvement could be introducing single-window clearance systems to fast-track project approvals.
This simple step could save time and cut delays for commercial real estate projects.
Another big opportunity lies in making it easier for foreign investors to invest in mixed-use and Grade-A office spaces.
Tax breaks for green buildings and smart urban projects can attract global investors and elevate the region’s status as a commercial hub.
With strategic government support, real estate can boost job creation and contribute to India’s $5 trillion economy vision,” stated Ashish Bhutani, CEO of Bhutani Infra.
In summary, the real estate sector is looking for a combination of financial, regulatory, and infrastructure support to drive growth and enhance housing demand.
The Union Budget 2025 is a crucial opportunity to address these needs and ensure the sector’s continued expansion.
Frequently Asked Questions
What are the key demands of real estate players for the Union Budget 2025?
The key demands include improved availability of housing finance, tax reforms, a reduction in GST, and faster project clearances.
How can increasing the interest amount limit for home loans benefit the housing sector?
Increasing the interest amount limit for home loans under tax exemption from Rs 2 lakh to Rs 5 lakh can make homeownership more affordable for middle-income homebuyers, thereby boosting housing demand.
What is the projected growth of the Indian real estate sector by 2047?
The Indian real estate sector is projected to exceed $4.8 trillion by 2047, contributing 18 per cent to the projected $26 trillion GDP, according to a joint report by EY and CREDAI.
Why is infrastructure development important for the real estate sector?
Infrastructure development, such as better connectivity and new growth corridors, is crucial for enhancing the real estate sector's growth and making housing more accessible across the country.
What are the benefits of single-window clearance systems for real estate projects?
Single-window clearance systems can save time, cut delays, and streamline the approval process for commercial real estate projects, making it easier for developers to get projects off the ground quickly.
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