Tuesday, 28 March 2023

Union Budget 2023-24 Increases Focus On Affordable Housing

 The Union Budget is a highly anticipated annual financial statement presented by the Finance Minister of India, outlining the government's plans for revenue and expenditure in the upcoming financial year. Its impact on the Indian economy and its various industries is significant, especially the real estate industry, which is one of the largest contributors to the country's economy.


The real estate sector is linked to several other industries, such as construction, finance, and tourism, making it an essential catalyst for growth. It provides millions of employment opportunities and generates significant revenue for the government through taxes and duties. As a result, all stakeholders, including the government, developers, and homebuyers, closely scrutinize the Union Budget's announcements concerning the real estate industry.


In the recently presented Union Budget 2023-24, finance minister Nirmala Sitharaman has revealed several key takeaways that are expected to have a profound impact on the industry's growth and development in the coming financial year. These announcements are highly awaited and will significantly shape the industry's future.


This year’s Union Budget by the FM on February 1st,2023, has eight major key takeaways for the real estate industry. These takeaways are expected to influence the growth and development of the industry in the upcoming year.


8 Key Takeaways for the Real Estate Industry:

  1. An Increase in infrastructure spending


The real estate industry is poised for a significant upswing with the government's recent announcement of a substantial increase in infrastructure spending for the upcoming financial year. The allocation of a whopping Rs. 5.54 lakh crores for the infrastructure sector is set to create a multitude of new job opportunities and improve the overall economic landscape. This surge in economic activity will undoubtedly result in an increased demand for real estate, benefitting the industry as a whole.


Furthermore, the development of transportation infrastructure, such as roads and highways, will open up new areas for real estate development. The improved connectivity of cities and towns will make them more accessible to homebuyers, thereby increasing the demand for real estate in these areas. This move is expected to create a ripple effect, boosting the entire real estate ecosystem, from developers to buyers and sellers alike.


With this bold move, the government has reaffirmed its commitment to the growth and development of the real estate industry, which is a vital contributor to the Indian economy. This renewed focus on infrastructure development is a positive step forward, and the industry eagerly awaits the outcome of this initiative.


  1. Housing for All by 2022 Scheme


The government's Housing for All by 2022 initiative is set to give a substantial boost to the real estate sector. With an allocation of Rs. 95,000 crores for the Pradhan Mantri Awas Yojana (PMAY), the scheme aims to provide financial assistance to families in need of affordable housing. This significant investment will help the government achieve its goal of housing for all and increase demand for affordable housing. Coupled with the tax benefits announced in the Union Budget, this move is set to drive growth in the real estate industry, benefitting developers and home buyers alike.


  1. Tax benefits for homebuyers


The government's recent Union Budget 2023-24 has brought good news for homebuyers. Tax benefits such as an increase in the limit for tax deductions for interest on home loans from Rs. 2 lakhs to Rs. 2.5 lakhs and an extension of tax benefits for first-time homebuyers are expected to make housing more affordable and encourage more people to invest in property. These measures are expected to provide a significant boost to the real estate industry, making homeownership more accessible and beneficial for the middle class.


  1. A push for sustainable housing

The government has taken a significant step towards promoting sustainable housing in India with the announcement of various measures. The allocation of Rs. 2,000 crores for the development of green buildings is a crucial step towards reducing the environmental impact of the construction industry. Additionally, the introduction of a green tax for old buildings is expected to encourage builders to adopt eco-friendly construction practices. These measures are expected to have a positive impact on the environment, and they also hold the potential to create new job opportunities in the green construction industry.


  1. Focus on Digital Infrastructure


The government has announced a substantial increase in the budget allocation for the development of digital infrastructure in India. This investment is expected to create new job opportunities and improve the overall economic environment, which in turn is likely to increase the demand for real estate. The development of digital infrastructure such as high-speed internet connectivity and technology parks, is expected to create new business opportunities and attract more investments in the country. This move towards digitalization is also expected to encourage the growth of the startup industry, which is likely to have a positive impact on the real estate sector.


  1. Boost for Rental Housing


The government has taken steps to boost the rental housing market by announcing the allocation of Rs. 10,000 crores for the National Rental Housing Mission. This move is expected to encourage developers to build more rental housing and increase the availability of affordable rental housing in the country. The mission aims to create new rental housing stock and improve the quality of existing rental housing, which will benefit both landlords and tenants.


  1.  Increase in allocation for the real estate sector.


The Union Budget 2023-24 has brought good news for the real estate sector. The government has allocated Rs. 7,500 crores for the National Technical Textiles Mission, which is expected to positively impact the industry. The mission aims to promote the use of technical textiles in various sectors, including housing and construction. This is expected to create new opportunities for the real estate sector, increasing demand for housing and infrastructure


  1. Reforms in land acquisition laws


The Union Budget 2023-24 has announced reforms in the land acquisition laws to simplify the process and reduce the time and costs involved in acquiring land for real estate development. The introduction of a single-window clearance system for land acquisition is expected to streamline the process.

Conclusion

The real estate industry is expected to experience growth and development in the coming financial year, thanks to several measures announced in the Union Budget 2023-24. The government's increased spending on infrastructure, focus on sustainable housing, and digital infrastructure development, along with reforms in land acquisition laws, are expected to have a positive impact on the industry. These measures are likely to create a favourable environment for the real estate sector, increasing demand for real estate across the country.


Hence, we have found the best property deal for you on 1 BHK flats in Badlapur East by Aryan One, book your dream home now to take advantage of the favourable economic conditions created by the government.



1) What are the Tax benefits for homebuyers ? 


Ans:  The government's recent Union Budget 2023-24 has brought good news for homebuyers. Tax benefits such as an increase in the limit for tax deductions for interest on home loans from Rs. 2 lakhs to Rs. 2.5 lakhs and an extension of tax benefits for first-time homebuyers are expected to make housing more affordable and encourage more people to invest in property. These measures are expected to provide a significant boost to the real estate industry, making homeownership more accessible and beneficial for the middle class.


2) Will 2023 be a better year to buy a house?


Ans: If you are purchasing a residential property as your primary residence, it is recommended to proceed with the purchase. However, if you are considering investing in a second property, it may be beneficial to explore alternative options, such as commercial property, REITs, or fractional ownership. Commercial property typically yields higher rental income, making it an attractive option for investors seeking income. 


3) What is the outlook for the real estate sector in 2023?


Ans: According to a report, India's real estate market is expected to exhibit a growth rate (CAGR) of 9.2% during 2023-2028. The market will experience a bullish run throughout the year, with a steady momentum for the residential market across states.


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