Realty sector welcomes relief measures, expects unsold inventory to start falling

NEW DELHI:  The Centre on Thursday announced a slew of measures, including tax reliefs and additional fund allocations, to boost the country’s ailing housing sector.

Industry representatives welcomed the measures, saying that they would help them clear unsold inventory, reduce the burden of buyers, and create more employment.  

Among the measures is a relaxation in income tax norms on the sale of residential units priced up to Rs 2 crore below prevailing circle rates.

Until now, only a difference of 10 per cent was allowed between the circle rate and the agreement value. This has now been increased to 20 per cent till June 30, 2021. 

Anuj Puri, Chairman - ANAROCK Property Consultants, said, “The consequential relief up to 20 per cent to buyers of these units under Section 56(2)(x) of the IT Act will definitely boost demand, especially in the affordable and mid segments.”

According to Anarock, there are approximately 5.45 lakh unsold units across India’s top seven metro markets. 

The government has also announced an allocation of Rs 18,000 crore in additional funds for the Pradhan Mantri Awas Yojana and a Rs 6,000 crore equity infusion into the National Investment and Infrastructure Fund (NIIF).

“The additional outlay of Rs 18,000 crore for PMAY is a step in the right direction towards fulfilling the vision of Housing for All... it will generate employment and support other industries, having a multiplier effect on the economy,” said Anshuman Magazine, Chairman & CEO - India, South East Asia, Middle East & Africa, CBRE.

Industry executives also said that the move would encourage many developers to consider taking up housing projects under the PMAY Urban scheme.  

CREDAI President Satish Magar said that the additional credit under the ECLGS scheme was also a welcome step and would address the liquidity crisis to a certain extent.

“The one-year moratorium on principal payment is encouraging too. However, the restriction of SMA 0 accounts will deprive many borrowers particularly real estate developers. CREDAI hopes that the Government would reconsider the restriction of SMA 0 accounts,” said Magar.