The Union Budget 2024-25 has introduced pivotal changes and strategic investments that promise to significantly impact the real estate sector. While the removal of indexation benefits for properties purchased after 2001 signals higher tax burdens for property sellers, the budget simultaneously unveils substantial allocations and reforms aimed at fostering growth and development within the industry.
Budget Highlights Impacting Real Estate
The budget has notably allocated Rs. 10 lakh crore under the PM Awas Yojana-Urban 2.0, targeting the housing needs of 1 crore poor and middle-class families. This landmark allocation is expected to boost the affordable housing segment and create millions of jobs. Additionally, Rs. 11.11 lakh crore has been earmarked for infrastructural development, with a focus on transit-oriented development and the innovative PPP model for rental housing in urban centers.
Industry Leaders React
Mr. Mohit Goel, Managing Director of Omaxe Group, praised the budget's comprehensive approach: “Budget 2024 stands out for its people-centric vision and powerfully advancing affordable housing in urban areas with a landmark allocation of Rs. 10 lakh crore under the PM Awas Yojana-Urban 2.0. The allocation of Rs. 11.11 lakh crore for infrastructural development, along with the innovative PPP model for rental housing in urban centers and the strategic push for transit-oriented development showcases a forward-thinking approach. These initiatives will undeniably propel real estate development in the right direction.”
“In essence, the budget represents a strategic economic boost, ensuring India’s macro growth remains resilient amid global uncertainties. By prioritizing key sectors such as skilling, urban development, and infrastructure, this budget injects crucial energy and momentum into the economy,” he added.
Rajjath Goel, Managing Director, MRG Group, highlighted the sustainability focus: "The Union Budget has made an unequivocal statement about its commitment to sustainable urban development, with a sharp increase in finances for projects aimed at improving connectivity and the quality of life in cities. There is a robust framework brought out in the new budget for integrating renewable sources of energy into housing projects in urban areas towards modernizing cities and accommodating the growing urban population effectively."
Mr. Harinder Singh Hora, Founder Chairman of Reach Group, reflected on the past year's success and future opportunities: "The real estate sector witnessed a phenomenal year in 2024. Stable interest rates, ample supply, strong economic growth, and the government's focus on infrastructure development all contributed to a significant boom. As we look towards the future, particularly with the retail sector poised for rapid expansion, ensuring commercial real estate policies that accelerate demand and growth which is further aligned with the government's commendable goal of promoting entrepreneurship is crucial. Reducing GST on construction materials and implementing a single-window clearance system would be a significant step forward."
Uddhav Poddar, MD, Bhumika Group, emphasized the impact on commercial real estate: "The emphasis on infrastructural development by allocating Rs. 11.1 lakh crores along with employment generation and skill development will boost real estate development and provide a fillip to the commercial segment. The promulgation of the PPP model for rental housing in urban centres, along with transit-oriented development (TOD), will also promote real estate development."
Prasoon Chauhan, Founder & CEO, Aurika Homes, focused on affordable housing and infrastructure: "A key highlight of the Union Budget 2024 is the allocation of ₹10 lakh crore to urban housing, which will significantly advance affordable housing and address the needs of middle-class homebuyers. Additionally, the recommendation for state governments to reduce stamp duty is commendable, providing substantial relief to millions of buyers by lowering registry costs."
Gurpal Singh Chawla, Managing Director, TREVOC, praised the budget's vision: "The budget embodies a powerful vision for India’s future growth, and we are thrilled to see the government's strategic focus on infrastructure development, job creation, youth skilling, MSME support, and urban housing. The government's proposal to reduce stamp duty is a game-changer, offering significant relief to millions of buyers by reducing registration costs. This important move will undoubtedly fuel demand and invigorate the sector, sparking a new wave of growth."
While the removal of indexation benefits for properties purchased after 2001 introduces higher taxes for sellers, the Union Budget 2024-25 provides a balanced approach with substantial investments in affordable housing, infrastructure, and sustainable urban development. The strategic initiatives outlined in the budget promise to drive growth, create jobs, and enhance the overall real estate landscape, fostering a resilient and inclusive market for the future.
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