 "The real estate sector is hoping for the industry status in this Union Budget. AP")
With Budget 2025 on the horizon, all eyes are on the government to introduce measures that could shape the future of India’s real estate sector. The industry is aiming for a $1 trillion market by 2030 and this budget is seen as a key opportunity to address the challenges holding back its growth. Addressing issues such as affordability and price stability is the need of the hour and could help reignite momentum and pave the way for sustainable development.
Revisiting the affordable housing cap
The current pricing cap of Rs45 lakh for affordable housing was set in 2017. This no longer reflects today’s market conditions. Aligning this cap with inflation and rising property costs is essential to ensure homebuyers could benefit from a lower GST rate. Such a revision would make affordable housing schemes more accessible to a larger segment of buyers, boosting demand and supporting the housing sector’s growth. With the forthcoming budget, there is hope for reforms that address this issue. Adjusting the definition of affordable housing could pave the way for sustainable growth and foster optimism within the real estate market.
Infrastructure growth in Tier 2 and Tier 3 cities
Tourism-driven real estate is rapidly gaining traction, catering to the aspirations of NRIs and HNIs seeking luxury properties in scenic and culturally rich locations. Destinations with natural beauty or heritage appeal are seeing rising demand for second homes and vacation properties that offer exclusivity, comfort and proximity to nature. To capitalise on this potential, the government could introduce targeted incentives such as tax breaks, subsidies or simplified regulations for developers of luxury projects in these regions. These measures can drive investments, making such locations even more desirable.
At the same time, infrastructure development in Tier 2 and Tier 3 cities has become a critical focus for balanced urban growth. Enhanced roads, public transport, healthcare and educational facilities can improve quality of life, attract industries and create employment, reducing congestion in metro cities. This, in turn, boosts demand for residential, commercial and industrial spaces in these emerging hubs. Better connectivity and modern amenities in these cities also resonate with millennials and young professionals seeking affordable yet contemporary living options.
Impact Shorts
More ShortsBoosting REITs through stable tax policies
For the growth of the real estate sector, a consistent tax framework for Real Estate Investment Trusts (REITs) is crucial. REITs, which channel investments into income-generating real estate, have the potential to attract significant capital. Simplifying and standardising taxes on REIT income, including dividends and capital gains, could make them more investor-friendly. This would encourage investment in premium assets and support infrastructure and urban projects. A stronger REIT market would create jobs across construction, management, and allied industries, boosting economic growth. Globally, REITs have driven real estate development and investor confidence. With correct reforms, they could play a transformative role in India’s real estate ambitions.
Industry status for real estate
A long-standing demand has been to grant industry status to the real estate sector. This move would reduce borrowing costs and attract institutional investments. It could also stimulate growth, create jobs, and boost economic activity.
The momentum built by the real estate sector in recent years reflects its growing importance in India’s economic framework. With urbanisation accelerating and demand rising across various segments, the 2025 budget is a chance to address challenges that have long hindered progress. Granting industry status to real estate would not just be a symbolic gesture but a transformative step which could unleash untapped potential.
The author is CEO and Director, Axis Ecorp. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.