Realty sector seeks industry status

Visakhapatnam: Increase in demand for housing by almost half during 2022 compared to the previous year following improvement in the economy has generated a lot of expectations in the Union Budget, now under preparation.

In view of recessionary trends in many countries, increase in raw material price and rising interest rate has dampened spirits in the realty sector to some extent. With elections scheduled in 2024, Credai has reiterated the demand for according industry status to the real estate sector.

Getting loans will become easy for the developers as the realty sector is the largest employment generator after agriculture. "We hope the government will concede our demand and also introduce rationalisation of the GST structure," Credai Visakhapatnam zone chairman B Srinivasa Rao told Bizz Buzz.

There is a long pending demand by many for revival of Input Tax Credit as a huge amount of GST is levied on steel and cement. He said affordable housing should get a major thrust by increasing the ceiling from Rs 45 lakh to Rs 75 lakh. He also wanted reduction in housing loan interest to encourage many to buy houses and a rise in tax benefit on interest paid towards EMIs under Section 24 (B).

There is also a demand for doling out sops for rental housing to the developers. With land becoming scarce in the urban areas and many companies post-pandemic allowing hybrid models of work viz work from home and office, the realty sector also sees a huge demand for affordable housing in semi-urban and rural areas.

Mohit Nirula, CEO, Columbia Pacific Communities, said the residential sector constitutes between 60 to 65 per cent of the real estate industry. The trends from 2022 show that there has been a considerable uptick in the demand for homes with sales volumes being at their highest since 2014. Interestingly, the demand is not from investors but from end-users. It is for this reason that the Union Finance Minister could be kind to home-buyers by increasing the tax rebate on home loans under Section 24 (b) to Rs 5 lakh.

He said the increase in repo rate in the past year has made home loans more expensive by up to two per cent. The increase in tax rebate at a time when they are also battling inflation will be welcomed by the citizens. There is a need to review and revise the parking norms for communities designed for seniors. Consumer feedback and industry data reveal that less than 30 per cent of seniors own cars. Currently, the parking requirement norms for such communities are the same as that of mixed-family residential condominiums.

Nirula stated that the additional space that needs to be provided for parking adds cost and wasted square footage to projects. "This, in turn, needs to be borne by customers," he said and sought review on this issue.

"Developers in semi-urban and rural areas should be given interest relief and other incentives," said P S Kumar, a builder, insisted on expediting the process in all States for digitisation of data to avoid land-related problems.