The ongoing financial year will culminate in less than a month. We witnessed some action packed events in the real estate sector towards the end of this fiscal year, which in a latest is paused at the Real Estate Bill. Summing up these events, we can expect a drastic change in the core functioning of real estate in the coming days. Here are some of the major events that will mold real estate sector for the upcoming fiscal year.
Real Estate Bill
The most awaited Bill was passed after a series of delays for almost two years, the last to be in the Monsoon session. But post to that, Centre has taken the Bill in priority and passed it in the fresh session of the Parliament. It rightly aims to bring transparency, regulations and removing the severe deadlock of timely completion of projects for the buyers. The bill is also poised to bring more FDI to the sector and will be the core factor behind the facelift of real estate.
After the declaration of the first batch of 20 smart cities, the Centre is likely to come up with the second list in this April. The enlisted cities will get the kitty pack of Rs 100 crore for the next five years from the government. Real estate growth of the new era has been revolving around these Smart Cities. Now that 40 more cities are likely to come up in the upcoming list, real estate sector will stretch its wings to newer horizons.
- The fear of losing the tax benefit on home loans was the major nightmare for home buyers caused by builders’ delay on delivering on time. At present Centre allows a deduction upto Rs 2 Lakh on interest paid on home loans, if the buyer gets possession in three years. But now that the Budget has extended three years to five years, buyers will get some relief.
- Additional Rs 50,000 tax benefit has also been introduced in the recently concluded budget for first time home buyers. This is applicable on interests for loan upto Rs 35 Lakhs and property value not exceeding Rs 50 Lakh.
The global stardom of our economy wouldn’t be possible if the real estate sector didn’t think out of the box. Realty’s supreme role in catering the economic boon is evident from the very fact that it contributes a major role in our GDP (Gross Domestic Product). Further, it is relevant to note that the sector is one of the dearest domains for foreign investments. With this instrumental role of realty, the economic growth is widely expected to notch up to 7.6% for this fiscal year.
Repo rate cuts
Frequent repo rate cuts facilitated by RBI (Reserve Bank of India) will also help the real estate sector to curb the unfavourable sentiments of buyers. These rate cuts are likely to lubricate the buyer sentiment in favour of real estate. Reacting rightly to the rate cuts this fiscal year, some private and public banks had also eased home loan rates. Now that the CPI (Consumer Price Index) data has recorded a four month low at 5.18% in February, economists widely expect the apex bank of India to cut rates further as they meet for their first monetary policy later in April.