Budget 2013: Nothing noteworthy for the real estate sector?

Is this time’s Budget underwhelming for the real estate sector? First reactions indicate the Finance Minister’s plans for the sector have left the real estate neither pleased nor complaining.

Anuj Puri, Chairman & Country Head, of real estate firm Jones Lang LaSalle India, termed the Budget as realistic but said it did not have any implications for real estate.

“This was a moderately encouraging budget in general, but tepid for the Indian real estate sector,” said Puri.

 The Finance Minister’s move to give affordable housing a boost is being viewed as a positive one with home buyers getting an additional interest benefit of Rs. 1 lakh on first-time home loans up to Rs. 25 lakh.

More from Economy

Inflation likely to be a big focus area for budget 2024, say sources Explained: Will the Bank of Japan break tradition and raise interest rates?

“However, this provision is only for the first year and with a carry-forward benefit of the unutilized deduction to the second year. This will help boost housing sales in tier 2 and 3 cities and peripheral areas and distant suburbs of metros, but not within the metros, where housing is more targeted towards the mid and upper income segments,” Puri said.

The creation of a Urban Housing Fund by the NHB with an allocation of Rs. 2000 crore will infuse liquidity for urban housing, thereby boosting demand, he said.

The rate of abatement on homes and flats of above 2000 square feet or costing Rs. 1 crore and above has been reduced from 75% to 70%. Effectively, this translates into an increase in service tax outflow, which means that luxury housing will now become even more expensive, Puri said.