How this budget can make housing affordable?

The budget which was presented earlier by our Finance Minister Pranab Mukherjee has disappointed developers. Stakeholders are eagerly awaiting for this year's budget to give a boost to the property market. The major reason for of the negative outlook for the real estate sector has been the increasing cost of debt to both developers and property buyers.

There is a high demand to promote special residential zones (SRZs) and liberalization on floor area ratio (FAR) for which the Finance Ministry has to take an action and make housing affordable and a viable business proposition for developers.

Bank financing has to become much more cheaper and easier to give the real estate sector a much needed momentum. To make housing more affordable opening up of external commercial borrowing in real estate is required. As more and more foreign investors are getting interested in the Indian real estate, there's a need for liberalisation of norms for repatriation of foreign direct investment to be done. In this budget one should also expect a revamped urban renewal mission to address the serious issue of rising urban infrastructure.

The RBI has asked banks to exclude stamp duty, registration fee and other levies from the total cost which means now home buyers have to arrange for this money by themselves and won't be included in home loan. But, the National Housing Bank (NHB) through its joint venture mortgage guarantee company will ensure higher credit availability at lower interest rates to home buyers.

Allowing foreign investment in multi-brand retail, extending external commercial borrowing limit, providing infrastructure status to townships, cheap finance, streamlining building approvals to prevent cost overruns, introducing real estate regulator, facilitating affordable land for low cost housing, reduction in minimum alternate tax for SEZs and measures to boost skilled manpower and other host of policy initiatives may put real estate on fast track.

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