Much on expected lines, the government in Budget 2018 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. Now, Budget 2018 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% of the consideration – this would affect only those localities where circle rates are higher than prevailing market rates.
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.