We also expect the budget to
make announcements regarding the regulation of construction material costs. While inflation may have come down, the cost of construction has not followed suit and many developers with less capitalization have been forced to slow down or halt their projects because of this. The costs of raw materials such as cement and steel need to be brought down or an upper ceiling imposed on their prices.
-Anil Pharande, CMD - Pharande Spaces
Another expectation from the Union Budget is that it will announce a reduction in the cost of property registration. The recent hike in ready reckoner rates in Maharashtra has been a sentiment setback for the real estate sector. Stamp duty and registration costs are as high as 6% in most cases, and this needs to be reduced by a few base points to aid consumers. Alternatively, a slab-based approach should be introduced. Stamp duty falls under state government purview, but the Center can nevertheless issue a directive to reduce stamp duty costs.
-Kishor Pate, CMD - Amit Enterprises Housing Ltd:
Also, the budget needs to do something to bring down the cost of borrowing for developers, because raising capital for development of new projects remains a huge challenge. Lending rates for real estate development currently range between 12-14%, and raising funds through other sources is even more expensive. The interest rates on lending to real estate developers should be brought down so as to help rationalize the cost of construction. This would also help in bringing down property prices.
-Arvind Jain, Managing Director - Pride Group