From ‘encouraging’ to ‘could have been better’ to ‘nothing for us’, Thursday’s Union Budget evoked varying responses from home buyers, realtors and builders in Hyderabad.
Since home buying has started picking up in the city after a prolonged lull, builders feel that impetus in form of more relief could have helped. But the provision of an additional deduction of interest of up to Rs.1 lakh for home loans has been welcomed by many. This is offered for first time home loans up to Rs.25 lakh.
“Increasing the deduction from Rs.1.50 lakh to Rs.2.50 lakh is definitely a welcome move. Though not a big amount, it will act as a psychological spur for the middle class aspiring to acquire a home,” opines P. Prem Kumar, president, A.P. Real Estate Developers Association (APREDA).
For the real estate in Hyderabad, even such smaller incentives could add up. Some in the construction industry feel that with property prices being lowest here in the city, this small incremental advantage could come to help them.
Mitesh Surendra Kulkarni, vice-president & business head, Mantri Developers, describes the additional deduction as a positive step. “It will lead to a multiplier effect and I am sure will enthuse prospective buyers,” he says.
The enhanced deduction of interest is also seen as a welcome step by some prospective home buyers. “When applying for home loan, each rupee counts. Today’s announcement of an additional Rs.1 lakh exemption is a good development,” says P. Sai Kumar Goud, a travel agent.
M. Muralidhar Rao, a private employee who is planning to apply for a home loan, shares the sentiment. “I am dreading the financial burden and this additional deduction surely offers some relief to me,” he says.
Bankers on their part feel that the exemption could encourage people to apply for housing loans. “Many people take loans to claim tax exemption and this increased limit could translate into more loan-seekers,” points out a senior executive form a leading private sector bank.
However, there are voices that sound disappointed with the budget. “It could have been much better. I wished for some real incentives for the real estate, but can understand the constraints that the Finance Minister had on his side of the table,” says S. Pochender, CEO of Lanco Hills.
D.S. Prasad, Director, Aparna Constructions, feels that the present offering does help buyers a bit though much more was expected. “The end-user would have been more benefited if the issue of high taxation was addressed,” he quips.
Real estate was given a cold shoulder yet again, argues D. Sreedhar Reddy, immediate past-president, National Association of Realtors-India. “There is nothing for the real estate sector in the budget. It has been neglected and the demand for an industry status has been ignored,” he argues.
For C. Sekhar Reddy, vice-president, Confederation of Real Estate Developers’ Association of India (CREDAI), the budget has been a big letdown. Even the recommendations of Housing Ministry on affordable housing were ignored, he says and adds, “We were expecting a lot, including infrastructure status for affordable housing projects and exemptions in taxation for them. But none has happened”.