Budget 2013 will improve the housing demand in the tier-2 cities, says Anuj Puri. With a deduction on loans up to Rs.25 lakh for the first-time-home buyers, the demand in the metros would not be affected, he added.
As against the sky reaching expectations of the real estate players and the developers, many of the expected reforms were not included in the Budget 2013. The omitted reforms include the real estate regulatory bill, infrastructure status on the housing sector, etc.
No initiatives were taken to speed up the clearance process as well. The builders have been demanding for the single window clearance system for speedy clearance. However their demand remains unheard by the finance ministry.
Economic Survey 2013 also revealed that delayed clearances are one of the main factors which increase the property prices. As per the survey report, the property prices are raised by 40% due to the delay in getting the clearance.
The average time taken for the project clearance in India is 196 days which means more than six months. The builders are to gain approval from over 34 authorities and this creates more delay.
However the housing sector may get a slight boost from the deduction of interest rates for home loans up to Rs.25 lakh. Whatsoever, the deduction will be applicable only to those who buy homes for the first time.
While commenting on the impact of Budget 2013 on the real estate sector, Anuj Puri said that the demand for housing units will be increased in the tier-2 and tier-3 cities. JLL India-head added that this will not have any good impact in the metros and other major cities.
Anshuman Magazine, CMD CBRE South Asia, opined that the Budget 2013 would be more effective if the deduction was allowed for home loans up to Rs.35 lakh.
However with the deduction of Rs.1 lakh the housing -demand will be at least improved in the tier-2 cities, tier-3 cities and other suburbs outside the metros. For the time being the real estate sector will have to be contented with this.