Realtors unhappy

Realtors unhappy
The Hindu Business Line, July 7, 2009, Page 7

Our Bureau, Bangalore

The Budget is not inspirational, at least for the real estate sector which was mainly looking up for some Governmental support for a speedier revival, says a section of the industry.

“There is nothing for the real estate sector. We were expecting some reduction in the taxes and duties for the housing sector, which is the most taxed sector with taxes accounting for about 40 per cent of the developmental costs,” said Mr Irfan Razack, Chairman and Managing Director, Prestige Estates Projects, a Bangalore-based real estate developer.

The Central Government needs to appreciate that one of its fundamental responsibilities to urban India is to provide good quality affordable housing, said Mr Ravi Ramu, Director – Finance, Puravankara Projects Ltd.

According to him, the tax revenues, sacrificed for the cause of some well-established industries through the extension of a further one-year tax-free status, should instead have been channelled towards providing financial incentives to housing developers build affordable homes in cities and towns.

Mr Navin M. Raheja, Managing Director, Raheja Developers, said that even if the Government efforts to implement, the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) would not be workable as the allied services and activities were not supportive.
However, while the Budget is good under the circumstances, what has been left out is a policy-level pronouncement for the sector, said Mr Anurag Mathur, Managing Director, Cushman & Wakefield India, a real estate services firm.

“These announcements could have gone a long way not merely in standardisation, but also in bringing in transparency for the real estate sector,” he added.

With the infrastructure sector receiving a much-needed thrust with the proposed SPV (India Infrastructure Finance Company Ltd - IIFCL) and increased allocation of funds, the real estate industry is bound to benefit significantly from the developments, said Mr Mathur. He pointed out that the decision to enable IIFCL to refinance 60 per cent of commercial bank loans in PPP projects would offer great opportunities to developers and infrastructure companies in the long run.

For the construction sector, “a positive initiative has been the full exemption on goods manufactured at site, thereby decreasing the cost of construction for developers,” he said.

The Budget has ignored the wishes of both property-seekers and developers, said Mr Aditya Verma, Business Head and Vice-President, Makaan.com. While prospective buyers were expecting an increase in income tax exemption limit (on repayment of interest on home loans) from Rs 1.5 lakh to Rs 2.5 lakh a year, developers were looking forward to an announcement to boost affordable housing in India,” he added.