From the forthcoming Union Budget 2012, realty sector have much expectation that it will contain some pragmatic provisions which will lower effective price barriers for home-seekers.
Broader incentives for development of affordable housing are needed, to encourage more developers to become active in this important sector and increase the supply of budget homes in the city as the city continues to face problems including high lending rates and construction costs, insufficient infrastructure and lack of affordable housing, says real estate developers.
Anil Pharande, Vice-president of Credai (Confederation of Real Estate Developers Associations of India) Pune Metro, said that “The government can set clear guidelines on timely commencement and completion of projects and link disbursement of these funds with adherence to these guidelines.” Also a higher allocation of infrastructure funds for housing can be a favourable approach on a macro level,he said.
In addition he also said that removal of the 10 per cent service tax on residential real estate construction, that increases the cost of new homes by as much as 3 per cent, is critical for a cost-sensitive market like Pune, where mainly the lower mid-income segment resides.
Also the 1 per cent interest rate subsidy on home loans can also work as a good measure to bring affordability. Also the present eligibility limit of loan amount of Rs 20 lakh should be raised to Rs 30 lakh which will help people think about buying apartments of decent sizes. Reducing taxes such as excise VAT and stamp duty on real estate will also make home purchase attractive, Pharande said.
