The Union Budget 2021-22 presented by Finance Minister Smt. Nirmala Sitharaman on February 1 gave new hopes to the realty sector. INR 54,581 Crores announced for the Ministry of Housing and Urban Affairs along with new provisions have boosted the morale of developers in the country. Construction of the projects as well as business in the industry affected last year are expected to gradually fall back on track.
The industry experts applauded the Union Budget, especially the initiatives taken for real estate by the government. Prioritisation of affordable housing, provisions for construction workers, and tax deduction on home loan interest were some of the highlights during the budget presentation. Giving his mindful take on the budget, Mr. Pradeep Aggarwal, Chairman of National Council on Affordable Housing, ASSOCHAM said that the government's focus on infrastructural development will lead to job creation and thereby help people get financially stable. He also predicted an increase in buyers for affordable housing.
What is the status of the Delhi NCR real estate market post the Union Budget 2021-22 announcement?
Not only developers and other industry experts who are delighted but the provisions presented during the Union budget 2021-22 seem to have boosted the sentiments of the buyers as well.
Recently, Delhi NCR has reportedly witnessed an increase in demand for residential properties with the maximum preference for reasonably priced properties. The interest of the people lies in the affordable housing segment that values homes below ₹ 45 lacs.
Out of the whole affordably priced housing demand throughout the nation, the Delhi NCR real estate market single-handedly accounts for almost 38% at present. Always known for their outstanding contribution to the real estate market in Delhi NCR, Gurugram reportedly has a share of 32% of the whole demand while Greater Noida stands at 24%.
Out of 18,540 houses provided in Delhi NCR in the last 12 months, the affordable homes comprised a share of 61%.
The popularity of the affordable housing segment
The affordable housing scheme under Pradhan Mantri Awas Yojna was launched by the government in 2015 with an aim to provide housing for all by the year 2022. In these years, the buyers have responded positively to this scheme and its popularity has grown year after year.
At a time when other segments of the real estate sector were massively affected due to the Covid-19 pandemic, the affordable housing segment emerged as a saviour that continued to bring business in the sector. In fact, prior to the coronavirus outbreak, affordable homes accounted for a 31% share of the total residential real estate demand. In 2020, the demand surprisingly increased and witnessed a rise of 9%, resulting in the 40% demand in 2020.
Furthermore, during her latest budget presentation, Smt. Nirmala Sitharaman ensured to fulfill the vision of providing a house for all the citizens. She said, "This government sees 'housing for all' and “affordable housing” as priority areas. In the July 2019 Budget, I provided an additional deduction of interest, amounting to Rs 1.5 lakh, for a loan taken to purchase an affordable house. I propose to extend the eligibility of this deduction by one more year, to March 31 2022. The additional deduction of Rs 1.5 lakh shall therefore be available for loans taken up till March 31, 2022, for the purchase of an affordable house".
Such promising measures taken by the government to strengthen the affordable housing segment along with an incredible response from the buyers have encouraged developers to venture into this type of residential segment.