Wednesday, July 8, 2009

No immediate impact on real estate Assetventures

Real estate players in the city are a disappointed lot as they feel the finance minister's proposals for the sector have ignored the
aspirations of the Indian middle class.

The Pune branch of the Confederation of Real Estate Associations of India (Credai) said the industry's expectations to boost affordable housing and higher tax deduction
for interest paid for home purchases were not met. "While the FM talks of a slum-free India in five years, he seems to have completely missed the opportunity to offer relief and incentive to middle-class home buyers," Credai Pune president Satish Magar said in a statement.

"It is well established that housing/construction is an engine that can propel growth in the economy the linkages to hundreds of industries as well as employment to millions of workers seems to have not found any priority in the FM's budget. Overall, the budget doesn't address the needs of the housing industry at all," the statement read.

Anurag Mathur, managing director of real estate research company Cushman & Wakefield India, said, "Though there is no immediate impact on the real estate industry in the Budget, the finance minister has incorporated measures that have a mid- to long-term impact on urbanisation and hence on the real estate industry."

"While the budget is good under the circumstances, what has been left out is a policy level pronouncement for the sector. These announcements could have gone a long way not merely in standardisation, but also in bringing transparency for the real estate sector," he felt.

Anuj Puri, chairman and country head for real estate management company Jones Lang LaSalle Meghraj, said the fact that India Infrastructure Finance Company will be given more flexibility and has been authorised to raise Rs 1,00,000 crore for the development of the infrastructure sector is an indirect boon to the real estate industry.

"Of late, an increasing number of infrastructure projects have a real estate component by virtue of a cross-subsidisation principle. Therefore, boosting infrastructure projects gives an impetus to real estate as well," he said.

The fact that allocation for highway construction has been increased will mean improved and accelerated connectivity, raising the value of existing real estate along these routes and also opening up new areas for development, Puri said. According to him, the allocation increase to the Rajiv Awaas Yojna will help urban slum-dwellers get better houses.

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