Real Estate Sector Soars in 2024: Expectations and Industry Wishlist

The real estate sector has been one of the standout performers in 2024, buoyed by robust demand that has significantly boosted cash flows and strengthened the balance sheets of property developers. This positive momentum has drawn a wave of investor interest, driving the shares of realty firms to record highs or multi-year peaks. The Nifty Realty index has surged by an impressive 48% this year, underscoring the sector's strong performance. With the upcoming Budget, industry stakeholders are optimistic that the best is yet to come.

Key Expectations from the Budget

The real estate sector has a comprehensive wishlist for the Budget, focusing on measures that can stimulate demand, enhance affordability, and resolve structural issues. Here are the primary expectations:

1. Industry Status

?One of the foremost expectations is the granting of industry status to the real estate sector. This move would facilitate easier access to funding, attract foreign investments, and improve liquidity and project execution capabilities.?

2. Affordable Housing and Revival of Stalled Projects

?Additional funding under the Special Window for Affordable and Mid-Income Housing (SWAMIH) scheme and the launch of new subsidy schemes, such as the Credit Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY), are anticipated. Revising the definition and upper limit of affordable housing to align with current market conditions would further enhance affordability.

3. Tax Reforms

The industry is looking forward to revisions in tax slab rates, an increase in the standard deduction, and higher deduction limits for interest on home loans. Reducing the long-term capital gains tax rate would make real estate investments more attractive.

4. Digitization

The digitization of land records is a critical reform expected to increase transparency, reduce disputes, and streamline transactions.

Market Outlook and Key Players

Analysts and industry experts are optimistic about the continued focus on affordable housing schemes and enhancements in digital infrastructure. Companies like Prestige Estates, Macrotech Developers, and Godrej Properties are highlighted as positive picks. Data center-focused players like Anant Raj and urban developers like MICL and TARC are also expected to benefit.

The real estate sector's remarkable performance in 2024 highlights its critical role in the economy. With the right incentives and reforms in the upcoming Budget, the sector is poised for even greater heights. Enhanced affordability, tax reliefs, and digitization of land records are key to sustaining this growth and ensuring that the sector continues to attract robust investment and deliver substantial economic benefits.