Budget 2024: Real Estate Scenarios You Need to Know

Architect Chandrakant Sompura’s son Ashish Sompura stated that creations of today is an extension of what existed on paper 30 years ago.

Tax relief is one of the main things the real estate sector is looking forward to since it may boost opportunities and demand in the housing market.

The Interim Budget 2024, as expected, kept its focus on improving infrastructure and expanding connectivity across the nation while making no major announcements. This will help the growth of real estate not only in the nation’s top cities but also in tier 2 and tier 3 cities.

Union Finance Minister Nirmala Sitharaman announced during her speech for the interim budget 2024- 25 that the program would be introduced for middle-class individuals who are residing in chawls, slums, rental homes, or unapproved colonies.

‘Our Government will launch a scheme to help deserving sections of the middle class “living in rented houses, or slums, or chawls and unauthorized colonies” to buy or build their own houses.’ Sitharaman said.

Additionally, developers would like to see a larger area limit for affordable housing units. The affordable housing category saw a decline in overall sales from over 30 percent in 2022 to about 20 percent in 2023, according to a study by real estate consultancy ANAROCK. As a result, a lot of developers believe that the government will encourage this category.

The real estate industry and consumers have been advocating for the revision in the definition of affordable housing.

According to Vihang Sarnaik, Director of the Vihang Group, he expects that the finance minister will create a unique index of affordable housing for each Tier 1 and Tier 2 city, encouraging the affordability of housing and infrastructure in the periphery of metropolitan areas.

When defining housing affordability, it is critical to take into account important factors like labor costs, construction costs, land costs, approval costs, and inflation.

“For instance, in the case of Mumbai, where housing costs are notably high, we hope that the Budget will increase the price ceiling of affordable housing from Rs 45 lakhs to Rs 90 lakhs so that the whole affordable scheme benefits reach its intended audience. As per the current affordable housing scheme, the limit is set at Rs 45 lakhs and you will not find a single home in Mumbai in that price bracket,” he said.

In November 2023, Dinesh Kapila, the Ministry of Housing and Urban Affairs’ economic advisor, stated that it was impractical to categorize affordable housing as units costing up to Rs 45 lakh, considering the high cost of land in urban areas.

He said that a proposal to “improve the definition of affordable housing” had been sent to the finance ministry for the realty sector.

Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd, said, ” The Finance Minister underscored the government’s recognition of the significance of homeownership. In a notable announcement, the FM stated a housing scheme would soon target the middle class, extending to those residing in rented houses with the aim of facilitating the construction or purchase of their own homes. This initiative is expected to revitalize the Mid housing & Affordable housing sector.”

In Union Budget 2024, the government intends to advance its “housing for all” program as the demand for home ownership has grown since the COVID-19 pandemic. The FM stated in the speech that the scheme would assist segments of the middle class who live in chawls, slums, and rented properties in purchasing or building their own homes, even though the specifics have not yet been revealed.