The Union Budget 2018 is being touted as a balanced one that puts primacy on affordable housing. The government seems all set to meet the Housing for All target by the year 2022.
As such, the government has established an affordable housing fund with an increased allocation for Urban areas [PMAY] by 7.6%. According to the Finance Minister Arun Jaitley, 37 lakh houses have been sanctioned for construction in Urban areas. However, the prime focus is being placed on Rural areas where over one crore houses will be constructed between the years 2017 and 2019.
As such, the Affordable Housing Fund is set to provide better access to capital for both urban and rural areas.
Some Claim there will be no real impact on Real Estate Sector
While the Affordable Housing Fund is all set to create houses, several real estate specialists claim that nothing has been done to actually impact demand and supply.
As such, an alternative view claims that the Affordable Housing Fund will have no real impact on the real estate sector. Ramesh Nair, the CEO and Country Head of JLL India stated that the Income Tax slabs have not shifted and no other direct measures have been taken to influence buying habits.
He further commented that the real estate sector had been reeling for the past three years, and as such, they needed some serious intervention to help them out. This is especially true because the real estate sector contributes to three of the major aspects of the economy. It factors into 7.7% of the GVA, has created 15 million jobs in just 5 years, and influences the exchequer.
A Push Towards Affordable Housing
While the Budget 2018 certainly has its detractors, most people are optimistic about the push towards affordable housing in both urban and semi-urban areas.
To quote Rishi Jain, the director of Jain Developers, ‘Affordable housing looks like a good bet now. And in fact, the continued focus on smart city projects is expected to boost real estate activities further.’
Furthermore, Ashish Jindal, the Co-head of Sanctum Wealth Management, believes that the Budget 2018 will encourage even the major real estate companies to delve into affordable housing, thus stimulating both the real estate sector and also providing access to affordable housing.
In terms of demand for housing, Ashish Jindal, said
The Budget has given a big relief by allowing up to a 5 percent gap between the two and this has the potential to remove the irritant and revive secondary market transactions.
The Rural Factor
One of the major advantages of the Union Budget 2018 is that it clearly aims to push up the farmers’ income. This will further help increase consumption in the economy. This, in turn, will further stimulate the real estate sector.
Harshavardhan Neotia, the Chairman of Ambuja Neotia Group, clearly stated that an increase in farm spending will directly impact the real estate sector.
That’s the basic gist of the Union Budget 2018 and all the different perspectives in regards to the effect it would have on the real estate sector. As such, it seems like an optimistic time to become a homeowner.
However, when you do, you should also get yourself a legit home insurance to financially protect yourself in case of unforeseen circumstances.