Budget 2022: What's in it for the Real Estate Sector

Things are gradually starting to look up for the real estate sector, with 2021 turning the tide towards revival in a post-pandemic economy.

For a few years now, the focus of Indian budget reforms has been to aid "housing for all". Pre-covid, the affordable housing sector accounted for nearly 40% of the new scheme launches. With the budget briefcase for 2022, the real estate sector was expected to make up for the pent up aspirations of first-time buyers.

As priorities shifted and re-aligned in a post-covid world, securing a home developed renewed prominence for young and first-time home buyers. Here's looking at the Budget 2022's announcements and how they affect real estate businesses and consumers:

Outlay Under the Pradhan Mantri Awas Yojana

Budget 2022 has allocated ₹48,000 under the Pradhan Mantri Awas Yojana. This will enable construction of 80 lakh homes in the country, which will in-turn serve as affordable housing options for the consumers.

Contrary to what was expected, however, the budget didn't include any incentives to facilitate consumers from lower and middle income groups looking to buy a budget home. Additional deduction options or similar reliefs would have definitely helped in giving the real estate sector a boost from a demand point of view.

Faster Approvals for Land and Construction Related Approvals

Finance Minister, Nirmala Sitharam commented that the Central Government will help streamline procedures for land and construction related approvals. This aids the State Governments in reducing procedural delays and ensures faster deliveries of affordable housing schemes for the middle class and Economically Weaker Sections in urban areas.

Move Towards Digitalisation of Land and Construction Related Records

An important aspect touched upon by the FM in her announcement speech was the need for efficient use and record of land resources. The Central Government will urge all the States to adopt Unique Land Parcel Identification Number for digital record management of nationwide land and property resources.

In the coming decade, affordable housing is expected to drive the real estate sector like never before. India's current annual real estate contribution to GDP is $200. This is expected to rise to $500 by year 2025, which is roughly a whopping 12-15% of India's GDP. With this trajectory, real estate is touted to be the largest employment-generating segment in our country.

With rapid growth comes rapid responsibility, and we believe that technology will help revolutionise the real estate industry in the years to come.