Import duty cut on steel, cement to spur realty demand

Owing to the surge of property prices, the realty sector has been urging the Government to take necessary measures that will ease the burden on the developers. The real estate sector welcomes the tax reliefs that aims at curbing inflation and would spike the housing demand among consumers going forward. Now, the industry is expecting reduction in interest rates on home loans too

Mumbai: The recent measures announced by Finance Minister Nirmala Sitharaman to reduce the import duties on select raw materials such as steel and plastics along with steps to improve the supply of cement will boost the sentiments of the developers and end-users. Also, a sharp cut in central excise duty on petrol by Rs 8 per litre and Rs 6 per litre on diesel to control inflation was another progressive step being timely taken.

Owing to the surge of property prices, the realty sector has been urging the Government to take necessary measures that will ease the burden on the developers. The real estate sector welcomes the tax reliefs that aims at curbing inflation and would spike the housing demand among consumers going forward. Now, the industry is expecting reduction in interest rates on home loans too.

Bizz Buzz interacted with a few realty experts to know their views on the Government's intervention. Sandeep Runwal, President, NAREDCO Maharashtra, said, "This will surely provide some cost relief in terms of steel and cement prices. The reduction in fuel and cement prices will have an overall good impact on the real estate sector to keep the prices in check."

However, we also request the government to work on making interest rates on home loans lower and making GST input credit available to the developers at the current GST slabs. This will surely reduce the home prices making it beneficial to the larger part of the society, he said.

The experts believe that the government's decision to reduce import duties on the steel products is a much-needed intervention that will act as the catalyst in driving the momentum of the industry.

Pritam Chivukula, Founder & Director, Tridhaatu Realty and Treasurer, CREDAI MCHI said, "This shall surge the raw material availability in the country and put a stop to the ever-increasing prices in the market. The government's step to subside the inflation shall act as a propeller to strengthen consumer sentiment and help in maintaining project prices."

Additionally, we urge the government to lower the interest rates on home loans making the home buying buoyant for potential buyers, he added. Himanshu Jain, VP - Sales, Marketing and CRM, Satellite Developers Private Limited (SDPL) said, "The reduction in the prices of the raw material will have an optimistic impact on the sector to keep the prices in check. Further reduction of fuel prices will only pave a smooth way for the sector and reduce the pressure on the end consumers."

The industry has welcomed the government's intervention in stabilising the inflation of the market. Shraddha Kedia-Agarwal, Director, Transcon Developers, says, "This was a much-needed step to help neutralise the market condition. Cutting excise duty on raw material imports and fuel will definitely drive the positive sentiment of the end-user and the sector by the easy availability of the materials used in construction activities."

The will bring the much needed relief to the developers and the end users. Dr Sachin Chopda, Managing Director, Pushpam Group says that the reduction in import duties on iron ore and steel shall further pad the domestic availability of raw materials, which in return shall reduce the prices of steel products used in construction and control the rising prices of Properties.

The, analysts opine, measures announced by the government will only drive the momentum of the market and control the inflation rate.

They also feel that Government's intervention to tackle the inflation by announcing several measures by reducing customs duty on raw materials, lowering excise duty on fuel prices and an increase in export duty on iron ore and steel intermediates will further boost the 'ease of living'.

Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory, said, "For the realty industry, these measures will surely taper down the concern of the possible impact of the rising cost of construction inputs and bolster the overall infrastructural development."

Owing to inflationary concerns, the government has taken pragmatic steps to overcome the challenges that the real estate industry has been grappling with construction cost hikes due to increase in raw material costs.

Bhushan Nemlekar, Director, Sumit Woods said, "The waiving of customs duty on the import of some raw materials will bring down the cost of construction materials creating a positive impact on the developers."

Jitesh Lalwani - President, Homesync Real Estate Advisory said that it was a 'timely' move by the Government to announce key measures that will help bolster the availability of raw materials domestically, cool off prices of steel products, along with controlling the steep rise in prices of real estate projects resulting in strengthening the consumer sentiments amidst the backdrop of inflationary pressures.