Indian Real Estate
Indian Real Estate 2021: With a COVID crisis that has lasted nearly a year and changing economic trends around the world, India is no exception. In this scenario, any additional tax burden imposed as a result of the pandemic would have been a source of additional stress for taxpayers.
So it was great to hear the Financial Minister (FM) announce that there would be no changes to the tax structure and that it would be managed with planning and government resources. This not only provided relief to the pandemic-affected common man and small and medium-sized businesses, but it also shifted the emphasis to driving economic recovery.
The real estate industry also welcomes the proposed relaxation of InvITs (Infrastructure Investment Trusts)/REITs, which have enormous potential for increasing demand both globally and domestically, thus increasing overall funds available for the sector. Increased access to debt capital may result in more rapid closings of lower-cost acquisitions.
The government has also announced the formation of an asset reconstruction and management company for bank-stressed assets. A company will be formed to consolidate and assume stressed debt, then manage assets and offload them to Alternate Investment.
This will help in the resolution of non-performing assets more quickly. Furthermore, the tax exemption for notified affordable rental housing projects until FY 2022, as well as the additional interest extension by a year for loans taken to purchase an affordable house, will set the segment’s growth trajectory. This, in turn, will help the government achieve its goal of providing “housing for all.”
The Indian real estate 2021
The Indian real estate 2021 industry currently accounts for approximately 8% of the country’s GDP. Offices, retail, and warehousing will account for most of the growth in real estate in 2025. The sector as a whole is experiencing a strong comeback as a result of high residential sales across the country.
Increasingly, commercial real estate investments take place, largely through REITs and joint ownership models. A fractional ownership model could also benefit from REIT benefits, boosting investment.
Most industry reports state that the residential real estate sector faced numerous challenges prior to 2020. However, with the pandemic-induced work-from-home scenario, consumers’ perceptions of homeownership have shifted significantly.
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In 2020, the lockdown last year has made potential buyers realize how important owning a home is. NRI investments have also increased across various categories of the residential sector of the industry.
Developers will also benefit from a longer repayment cycle and a more rational capital supply. Over the years, gaining ‘industry’ status for the real estate sector has been a critical task. A three-fold benefit would result from this: equity investment, low-interest loans, and refinancing of debt.
Real Estate is a very exciting sector, and the budget appears very promising.
