Budget 2024: Real estate sector poised for promising future; expectations high for continued focus on ‘Housing for All’

The upcoming Budget 2024 is anticipated to prioritize 'Housing for All', tax relief measures, and sustainability initiatives to support the growth of the real estate sector in India.

Pushpender Singh
Updated30 Jan 2024
As the real estate sector looks forward to the Budget 2024, the expectations are high for a continued focus on 'Housing for All'. Photographer: Stephen Shaver/Bloomberg News.
As the real estate sector looks forward to the Budget 2024, the expectations are high for a continued focus on ’Housing for All’. Photographer: Stephen Shaver/Bloomberg News.(Bloomberg)

The Indian real estate sector is poised for a promising future, fueled by factors, such as urbanisation, positive policy reforms, rising consumer sentiment, and an increase in disposable income.

In 2023, the real estate sector in India witnessed unprecedented growth, surpassing previous records and showcasing remarkable progress.

This growth is attributed to policy reforms, a buoyant consumer sentiment, increasing disposable incomes, and a growing demand for larger homes.

As the nation's urban population continues to surge, the demand for both residential and commercial spaces is expected to maintain its exponential growth.

Also Read: Interim Budget 2024: From capital gains tax provisions to input tax credit, here's real estate industry's wish list

The positive home-buying sentiment experienced in 2023 is expected to spill over into 2024.

With urbanisation being the primary driver, the demand for real estate is anticipated to remain robust.

Property prices are expected to witness a substantial upsurge, albeit with varying growth rates across cities and regions.

Metropolitan areas are likely to experience higher price increases compared to smaller cities, reflecting the dynamic nature of the real estate market.

Also Read: Budget may cite ‘Vision 2047’ to seek long-term allocations

Budget expectations for real estate

The preceding Union Budget has been a promising one in terms of increased focus on long-term investments, marked by a substantial increase in capital expenditure and a dedicated focus on propelling technological advancements across various sectors, including 5G labs, agricultural tech, AI, infrastructure, and real estate.

In the forthcoming Budget 2024, we anticipate that the Prime Minister's vision of 'Housing for All' will continue to be prioritised to continue providing the supply-side stimulus and boost end-user demand.

The government is expected to set up a tax relief plan to make housing affordable enough to increase the demand.

We hope that the government will also increase the maximum limit of deduction from 2 lakh on housing loan interest rates up to at least 5 lakh.

Also Read: Budget 2024: Why there is an urgent need to hike Section 80C deduction ceiling for income tax benefits

A steady and predictable fiscal environment is crucial at this juncture to build on the existing consumer confidence within the real estate sector and therefore, we expect that the Interim Budget for 2024 maintains the existing tax regime to prevent short-term turbulence in the overall housing market.

Acknowledging the importance of sustainability, the budget is anticipated to continue the focus on energy transition in infrastructure development, urban planning, affordable housing, domestic manufacturing, and ease of doing business.

Allocating funds from the Urban Infrastructure Development Fund (UIDF) is crucial to supporting public agencies in creating urban infrastructure in tier-2 and tier-3 cities.

This strategic move is expected to drive the development of real estate in these untapped markets.

Also Read: Budget 2024: Expect pro-demand steps to address near term risks, says DBS Bank economist

As the real estate sector looks forward to the Budget 2024, the expectations are high for a continued focus on 'Housing for All,' tax relief measures, and sustainability initiatives.

The industry remains optimistic about the potential for sustained growth, further supported by urbanisation trends and positive policy reforms.

The upcoming budget is poised to play a crucial role in shaping the trajectory of the real estate sector in India.

(The author of this article is MD, JMS Group)

Disclaimer: The views and recommendations above are those of the author, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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