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Government addresses affordable housing, but larger issues remain unanswered

Government addresses affordable housing, but larger issues remain unanswered

Affordable Housing and Housing for AllBy Sudhir Pai,

Much on expected lines, the government in Budget 2018-19 has continued with its thrust for Affordable Housing and Housing for All scheme. The government has been consistent with its efforts in addressing affordable housing in 2017 — be it giving infrastructure status to this segment in the previous budget, to helping increase the quantum of beneficiaries in CLSS under Pradhan Mantri Awas Yojana (PMAY) by expanding the carpet area and re-defining income definitions. Now, Budget 2018-19 has further given impetus to affordable housing by creating a dedicated fund under the National Housing Bank (NHB).

This fund will be provided for from priority sector lending and fully serviced bonds authorised by the Government of India. Now that the government has created significant enablers to increase demand and to create favourable conditions, we should hopefully see a significant spike in new launches/supply in the coming days in the affordable housing segment.

It is also encouraging to see the government address the issues of housing in urban areas. While providing assistance to construct 37 lakh houses in urban areas will take care of the urban housing woes, financial assistance (Rs.2.04 lakh crore) to 99 Smart Cities will ease the pressure on the existing urban centres.

Further, the Finance Minister also proposed that no adjustment shall be made in respect of transactions in immovable property, where the circle rate value does not exceed 5 per cent of the consideration — this would affect only those localities where circle rates are higher than prevailing market rates. The government steered clear of further tax breaks for either industry or for the buyers.

That said, the government has been actively regulating the real estate industry over the last several quarters. From demonetisation aimed at curbing the effect of unaccounted money; to RERA which will help bring in consumer confidence, the real estate sector has seen significant regulatory influence in the past year.

While the budget is now done and dusted, there are some matters which would help drive the industry ahead more vigorously. We hope that going ahead the government will (a) address the issue of GST on new homes which is currently inflationary (b) examine the issue of lowering the cost of transactions, particularly stamp duty and registration fees (c) create enablers for the sector such as digitisation of property registries; guaranteeing or insuring land/property titles; enhancing liquidity in real estate markets through REITs and other means and (d) strengthen RERA to resolve disputes speedily and help drive confidence amongst consumers.

As we’ve been saying for a while now, there are green shoots emerging in the industry once again and we expect a gradual recovery in the course of 2018. With the government having done its bit, there is now need for concerted and purposeful action from developers and other stakeholders in the industry to do their bits and help the process for a better 2018 for real estate.

(Sudhir Pai is CEO of magicbricks. He can be contacted at sudhir.pai@timesgroup.com)

—IANS

Real estate players will contribute towards Housing for All: Gangwar

Real estate players will contribute towards Housing for All: Gangwar

Santosh Kumar Gangwar

Santosh Kumar Gangwar

New Delhi : Even as Union Minister Santosh Kumar Gangwar on Tuesday said real estate players will play a significant role in realising the aim of ‘Housing for All’ by 2022, realtors demanded setting up of a fund by the Centre for completion of stuck projects.

“Real estate developers will play an important role in realising our government’s vision of Housing for All by 2022. This will also mean mass urbanisation but this should happen without the proliferation of slums. Real estate developers and NAREDCO can play an important role in it,” Minister of State for Finance Santosh Kumar Gangwar said at the 14th national convention of National Real Estate Development Council (NAREDCO) here.

NAREDCO said both the government and private sectors needed to support their endeavour.

Raheja Developers CMD Naveen Raheja said: “More than 250 industries depend on real estate sector. The economy can move forward and Prime Minister Narendra Modi’s vision of Housing for All can be realised. But for that to happen, we need government’s support. The government should help and set up a fund for completion of stuck-up projects.”

Developers felt that creation of such fund would help realtors and home buyers alike since incomplete projects facing problems could be completed due to the move.

Uncertainty in the environment and recent developments like Goods and Services Tax implementation and Real Estate Regulatory Act (RERA) have only added to the woes of the developers, the realtors said.

“Developers felt that a change in mindset towards the sector is needed for resolution of the problems it is facing. With the government’s support they felt that good times for the sector are round the corner,” NAREDCO said in a statement.

—IANS