The India Budget didn’t have a massive impact on real estate this time around – and no news is welcome for the Indian property market that was arguably the largest sector most affected by demonetisation in late 2016 and further slowed down by RERA in early 2017 and then GST later in the year in 2017, phew! With that said, there wasn’t anything that will really propel real estate either, but as said before “no news, is good news” when it comes to properties in Mumbai and elsewhere in India – time to let the dust settle over this year and move forward.
For this year’s Budget the focus was largely affordable housing primarily in rural areas:
“Under Prime Minister Awas Scheme Rural, 51 lakh houses in the year 2017-18 and 51 lakh houses during 2018-19 which is more than one crore houses will be constructed exclusively in rural areas. In urban areas, the assistance has been sanctioned to construct 37 lakh houses.”
The Government is making a push to make sure that all Indians have a home by 2022 and the Government is also working a bit harder in rural areas where the BJP has lost some of its political momentum from the prior years.
The one positive, and a mild positive at that, for the overall Indian property market is in the form of tax relief by permitting property to be valued at up to 5% below circle rates when doing the calculation capital gains tax and for the stamp duty. Circle rates were earlier implemented to avoid tax evasion where many of the time a lower sale price than the actual sale price was used.
The Indian government most certainly does not require a Budget to make massive decisions as discussed in the first paragraph, so there is always a chance that changes will continue to occur in this very important sector.
At Jagaha.com, our view on real estate and specifically on property in Mumbai is that it will take this entire year for things to settle down and don’t foresee prices to increase that much across the board primarily due to the effects of demonetisation that will surely last well into 2019, if not 2020, especially for luxury properties. With that said, we do think that the office space for rent in Mumbai market will stand out quite well and could even see rental prices increasing toward the end of the year and demand continues to hold up.