The Interim Budget 2024: Insights for Real Estate Sector

• 2-crore more houses will be built under PM Awas Yojana Scheme in the next five years to enable middle-class living in rented premises to build their own homes.

• The housing for the middle-class scheme will enable mid-income individuals to realise their homeownership dreams while giving impetus to the associated sectors by creating more opportunities for all.

• India’s middle class is set to double up to 61% of the total population by 2047, up from 31% in 2020-21. The housing scheme will give confidence to an increasing number of people falling into this category every day

The interim budget 2024 has brought a fresh ray of hope to millions of middle-income households who aspired to buy their own homes, but are forced to stay on rent. In a positive move, 2-crore more houses will be built under PM Awas Yojana Scheme in the next five years to enable middle-class living in rented premises to build their own homes.

R&R, in its recent report, highlighted that the housing for the middle-class scheme will enable mid-income individuals to realise their homeownership dreams, while at the same time, giving impetus to the construction and associated sectors, thereby creating more opportunities for all.

The soon-to-be-launched housing scheme is expected to revitalise the affordable or mid-housing segment. The Interim Budget underscored the government’s recognition of the significance of homeownership. India’s middle class is set to double up to 61% of the total population by 2047, up from 31% in 2020-21. The housing scheme will give confidence to an increasing number of people falling into this category every day.

Vishesh Prakash of R&R, says, “While the Interim Budget 2024 made no big-bang announcements, it continued its focus on infrastructure upgrades and building connectivity across the country, which would benefit real estate growth in not just the top cities, but also in Tier 2 and Tier 3 cities across the country. Infrastructure continues to be the focus area of the government. With an outlay of 3.4% of the GDP, the benefits of such focused and continued efforts will percolate down to all real estate segments. Tier 2 and 3 cities can expect heightened real estate activity around the near-mid term. All said and done, the budget has a lot more to offer than what meets the eye, which will propel the real estate sector directly or indirectly in a significant way.”

The industry insiders feel that while the interim budget didn’t directly address the real estate sectors’ key demands, the upcoming union budget might hold more concrete measures addressing the industry concerns, potentially impacting the market trends.

Looking ahead, the real estate sector is expecting industry status, believing it would unlock benefits like easier access to credit, tax breaks, and infrastructure development. Besides, tax incentives and benefits for homebuyers, such as increasing the deduction limit on home loan interest under Section 24, are also being expected from the Union Budget to follow in the coming months.

Keeping up with these expectations will only make the housing sector in the country more dynamic than ever. With eyes now set on the upcoming Union Budget, the real estate sector is hopeful of its robust growth in the future.

Steps in the right direction

• Despite all the challenges, the implementation of this scheme continued, achieving the target of close to 3 crore houses, and now aims for 2 crore more houses to be taken up in the next five years, which is a step in the right direction.

• The Government will launch a scheme to help the deserving sections of the middle class, living in rented houses or slums, or chawls and unauthorised colonies, to buy or build their own houses.

• Extending tax benefits to startups for another year is yet another move in the right direction. This may help the real estate to rejuvenate and grow at a pace, which might be considered an opportunity in disguise for them.