Finance Minister Niramla Sitharaman on Thursday announced several measures to boost demand in the real estate sector. The differential of circle rate and actual price has increased to 20% from the earlier 10% for the sale of residential units of value up to ₹2 crore. The offer will be applicable till 30 June, 2021. This move will benefit both the homebuyers and real estate builders.
According to Real Insight Q3, PropTiger.com, the number of unsold inventory stood at 7,23,060 units in the top eight residential markets, as on 30September, 2020. This relief will help the real estate sector to clear the inventory amid a pandemic, believe experts.
"Realtors have been talking about the importance of strengthening real estate and allied sector; the Government is moving in the right direction with the latest announcement," said Mani Rangarajan. "This measure will help developers to liquidate, vacant stock, even at discounts. This should push sales and start the virtuous cycle in the economy," said Sudhir Pai, CEO, Magicbricks.
"The increase in circle rate and transaction value threshold from 10% to 20% will remove a transaction hurdle and save tax thereby increasing the opportunity for unbridled property purchase activity," said Shishir Baijal, chairman & managing director, Knight Frank India.
"While this will certainly help the real estate sector liquidate inventory as it brings more home buyers to the fore, the impact will be limited as unsold inventory is highest in Mumbai and NCR markets where properties values are higher than Rs. 2 cr," Sharad Mittal, CEO, Motilal Oswal Real Estate explained.
Finance minister also announced a ₹18,000-crore additional outlay for the urban housing scheme to help complete real estate projects. This will be over and above ₹8,000 crore already provided this year. The move will help start work on 12 lakh houses as well as complete 18 lakh houses.