Union Budget 2018 focuses on affordable housing but sans any direct impact on real estate sector

The Budget seems to be heading to have minimal direct impact on the Real Estate industry, a departure from the past three years, he said.

According to the Chairman and MD of Ascon, the sector was reeling for a while and was expecting major announcements to revive it.

The real estate contributes 7.7 per cent to GVA and ensured 15 million job creation over the past five years, he said. 

According to Jaiswal, the setting up of a dedicated affordable housing fund under the National Housing Bank for priority sector lending will provide a further impetus to the development of housing.

"The continued focus on smart city projects is expected to boost real estate activities further. Real estate is a function of multiple parameters and bearing of the overall economy. So if there is an overall boost to the economy through farm spending and so on; then we will see a spin-off effect on the real estate sector," he said.

Post demonetisation, the secondary market was turbulent due to lack liquidity; furthermore, in major cities, the circle rates were increased and had become more than the market rates. This resulted in a gap between the two rates, which was counted as income in hands of both buyer and seller, he said.

However, Jaiswal pointed out that the Union Budget 2018 clearly focuses on pushing up farmers’ income, thereby kick starting consumption in the economy, which is a positive.

But, he also pointed out that there should be parity between the Central and the state tax rates and regulations for the benefit of the real estate industry.