Affordable Housing & Cheap Loans are the main budget demand from home buyers
Roti, Kapda & Makaan - Real Estate Budget Expectations 2015 research by Makaan.com
Union Budget 2015 is round the corner & expectations have crept up in the minds of Indian home buyers. The Central government in its maiden budget had focused on Improvement in economic fundamentals, developing smart cities, implementation of infrastructure projects, increasing tax exemption on home loan repayment, etc. The government has also relaxed FDI norms in construction. All these positive steps have made home buyers expect more from Union Budget 2015. But, will the budget make it easier for an Indian to own a house? Will there be another income tax rebate on Home Loan? With the intention to gauge the expectations of home buyers from the forthcoming budget, Makaan.com, India’s fastest growing property site, has conducted a research – Roti, Kapda & Makaan - Real Estate Budget Expectations 2015.
Here are the key findings
1. Affordable housing & cheaper loans should be the focus of budget- A majority of our respondents i.e. 71% felt that to bring a significant impact on the Indian economy, the finance minister should allocate a much higher amount for development of 100 smart cities. Home buyers also felt that the focus in Union Budget should be on offering affordable housing (housing under 40 lac) with 36% feeling that this focus will enable maximum people to own a property and fulfill their aspiration. The next big focus for the buyers is on cheap home loans (26%, see graph) as most property transactions in India happen with home loan. Incentives for 1st time home buyers also features in the top focus item for home buyers.
2. Indian’s want the right to own a home as a “fundamental right” - fundamental rights are regarded as a set of legal protections that belong without presumption or cost of privilege to all human beings under a jurisdiction. As part of the research, Makaan.com asked the home buyers whether owning a house should be a fundamental right of Indian citizens. The results screamed in affirmation as a 58% of homebuyers said that owning a house should be a fundamental right of the Indian citizens.
As per the home buyers if such an amendment is passed in the Union Budget 2015, it will fulfill one of the basic needs of human being, i.e. Makaan and will also provide the much needed boost to the real estate sector and the economy on the whole. Only 21% home buyers each said that right to own a house should not be a made a fundamental right and 21% people said that they cannot comment on the topic. People faith in the current government was adequately demonstrated as 59% of home buyers felt that the Finance Minister will make it easier to own a house as part of his budget announcements. Only 20% people felt owning a house would become difficult after Union Budget 2015.
3. Home buyers are not satisfied with the current status of real estate sector - On a majority scale, the home buyers remained discouraged and adopted a wait and watch policy due to high property prices and home loan interest rates. This dissatisfaction of the home buyers comes out quite evidently with almost 67% of home buyers said that they are not satisfied with the current state of real estate sector in India. Although dissatisfied with the present property market, the home buyers have not let go all hope and are anxiously looking forward to decide their next course of action. When asked whether Union Budget 2015 will have a positive impact on real estate sector, the majority i.e 52% answered in affirmation. Now, it needs to be seen whether the Finance Minister will consider the aspirations of the home buyers and give them enough reasons to smile and think that the Budget has had a positive impact.
4. If I were the finance minister, will provide 2% subsidy on home loan & increase the income tax exemption limit on repayment of home loan - As part of the research, Makaan.com asked the home buyers to do a role reversal with the FM and suggest measures that can help create a positive impact on the Indian realty sector. Let’s look at the properties from the eye of the home buyers; if they were in power:
a) Majority of national home buyers (29%) would provide a 2% subsidy on home loan for houses upto Rs. 40 lakhs as a short term incentive. As per them, this step will give the much needed boost to the real estate sector.
b) 19% of the home buyers feel that they would provide an increase income tax exemption limit on payment of interest from 2.0 to 3.0 lac per annum.
c) Another 19% respondents said that if they were the finance minister they would setup a dispute redressal mechanism to safeguard the interest of home buyer. As there have been a growing number of cases of project delays and allotment cancellations, home buyers are discouraged and are finding it difficult to cope with such situations; therefore, the desire for the redressal mechanism is becoming stronger.
5. Property prices will increase after the Union Budget 2015 - the union budget will offer encouragement to buyers to invest in a residential property. This is likely to result in increased transaction and the positive sentiment is likely to result in higher property prices. 41% people feel that property prices will increase after the Union Budget 2015 while 35% say it will not. It needs to be seen if Finance Minister will consider these suggestions from the Indian home buyers. We will have to wait for the end of the month for this answer.
It needs to be seen if Finance Minister will consider these suggestions from the Indian home buyers. We will have to wait for the end of the month for this answer. Makaan.com wishes people a happy home buying in 2015.