UNION BUDGET 2017– Affordable Housing

by admin

The most awaited announcement after the demonetization was perhaps that of the Union Budget 2017. While expectations were varied, the outcome for the real estate sector turned out to be beneficial. After the demonetization, the sector was hit badly. The union budget announcements have been instrumental in reviving hopes to a great extent in the real estate sector.

With the introduction of changes that encourage Foreign Direct Investments, the scene is set for positive moves in the real estate sector in the near future. Coupled with other reforms that protect the interests of the buyers, they are expected to feel less apprehensive about investing in real estate now.  More investments would mean improvement and development occurring across different sectors along with the real estate sector. This is indicative of a developed economy in the making.

Another welcome news for the real estate sector was the appointment of ‘infrastructure status’ for the same. This pronouncement has come after many years and multiple demands from the real estate sector. In the past developers were compelled to pay high interest rates and go through a strict evaluation process. Such impediments of sourcing funds at a reasonable rate of interest delayed construction processes which led to an increase in the final cost of the residences. In the process, both developer and investor were affected badly. Although the ‘infrastructure status’ has been applied only to ‘affordable housing’, it is still a considerable improvement on the past policies.

Since the requirement of affordable housing in the country is immense, the infrastructure status now eases the way forward for the development of affordable houses. So also the announcement that states the requirement of the declaration of 30 and 60 sq meters carpet area instead of built-up area all over India with the exception of the four metros. Moreover, the Government has also increased the project completion timeline to five years for affordable housing which allows the developer more time to sell their inventory. In addition to that, the government has allocated a generous budget towards the development of rural connectivity, roads, highways and railway connectivity. With the increase in reach and connectivity, real estate development is expected to reach far and wide all over the country.

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