Real Estate Players Look Forward to More Sops from the Government

The developers in the Indian realty sector, which has been going through tough times in the last few years, are seeking more concessions from the government. One of the most important among them is the demand to raise the bar of affordable homes from INR 45 lakhs to INR 75 lakhs. The main aim behind this is to increase the sales of unsold properties and thus help the industry recover.

Homes under the affordable segment enjoy a number of sops. However, a number of properties in the growing inventory are priced above INR 45 lakhs, the upper limit of the price of affordable homes. Raising this limit to INR 75 lakhs would allow a large section of this unsold inventory to benefit from these sops instead of having to announce new ones.

The government had nudged the real estate industry to reduce property prices to sell off the unsold properties. However, the developers want the government to announce sops necessary to help the situation in the realty sector improve. They have argued that with real estate playing a major role in the Indian economy, growth in this sector would also result in economic growth.

A number of measures have already been undertaken to help the industry recover. For example, the home loan interest rates are at an all-time low, with RBI cutting down on the repo rate. However, the benefits are yet to trickle over to the homebuyers from the banks and NBFCs, as a result of which the expected spike in demand hasn’t appeared yet.

As per the results of a survey,the overall demand for residential properties would fall considerably by FY21. CREDAI has requested the government to make certain changes to existing home loan policies to help boost home sales. These include increasing the principal deduction limit to INR 2.5 lakhs and interest reduction limit to INR 10 lakhs. This would naturally make home loans more attractive and result in an increase in property sales. Some of other demands include reduction in circle rates, introduction of schemes to exempt the buyer from EMI for a certain period of time, etc.

The real estate industry together with a large number of associates industries employs the largest number of people in India. Betterment of this sector is crucial for the growth and stability of the economy.