Buying real estate is widely considered a safe bet by Indian investors. All speculative markets move in cycles and the real estate market is no exception. What buyers are waiting for is reasonable and affordable prices. As of now, end users are only looking at projects that are priced appropriately. Long-term financing at lower rates will reduce the costs of construction for developers allowing them to pass on benefits to consumers. Easy and dedicated access to institutional financing, higher limit on external commercial borrowings will attract more investments and assure sustained growth of affordable housing in India, making it the core driving segment for real estate.
The measures announced by the finance ministry holds relaxation in the time companies can take to complete projects from three to five years and a reduction in the rate of tax such companies have to pay as MAT or minimum alternate tax. Also, the carpet area of 30-60 square meters will now be applicable as against built-up area of 30-60 square meters; this will attract and encourage more consumers to buy a home in this segment thereby enabling developers to sell larger houses under this category.
While a lot still needs to be done, the government’s approach is progressive and developmental for the sector and has instilled a sense of optimism within the real estate consumers and developers. The economy is expected to see a positive shift in the overall purchasing sentiment. This initiative by the government is expected to fuel the entire value chain of the stakeholders to perform their role as a significant part of the country’s economy.