The Union Budget 2018 has been a disappointing development for Mumbai’s real estate developers, particularly in the MMR (Mumbai Metropolitan Region) where the market has still not revived yet. The only positive development is that the affordable housing category has received a boost since the Central Government has declared a special fund for this category via the National Housing Bank (NHB).
Real estate developers in Mumbai were hoping for a few incentives in order to help them sustain throughout the slump in the property market. As per industry experts, the real estate sector was expecting some major announcements. Developers were hopeful that the Union Budget 2018 would address key requirements pertaining to the allocation of infrastructure status for the realty sector and also in terms of single window clearance. The real estate sector was not directly impacted by the 2018 Union Budget. The income tax benefits have remained unchanged and the realty sector’s demand and supply equations have not been tampered with.
Many real estate developers anticipated that the Central Government would be tackling the GST rates which have burdened property buyers. They desired a lowering of GST or a merger of the same with stamp duty. However, real estate developers have been positive about the announcement by the Union Finance Minister Arun Jaitley with regard to setting up a dedicated affordable housing fund. This will be reviving sentiments of homebuyers and may work towards ensuring a revival of the real estate sector. The announcement of the Government may draw more corporate biggies towards venturing into the affordable housing segment as per experts.
Mumbai has limited scope in terms of low-cost housing. The high land prices in Mumbai are a major deterrent and several projects in the affordable housing segment are coming up in the outskirts of Mumbai and the MMR zone. Real estate developers are building compact homes for buyers but aspects like stamp duty, GST and red tape are major hurdles that are affecting sales volumes and leading to piled up inventory that remains unsold.
