How The Union Budget 2015-16 Affects
Property
Buying Sentiments..?
by Mr. Arvind Jain,
Managing Director - Pride Group
The Finance Ministry's budget for 2015-‘16 is at
hand and as always, every Indian will be waiting to see what it holds in store
for them.
The property sector in particular is very
sensitive to the annual budget, because it has a direct impact on how the
common man perceives the viability of purchasing a home.
Every Indian cherishes the notion of owning a
home, and every year sees a new segment of Indians entering the stream of
employed and salaried individuals who have this this aspiration.
These individuals are just starting out in their
careers, and their purchasing power is at the lowest point. Therefore, they are
very sensitive to every factor that influences their current finances.
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| Arvind Jain, Managing Director, Pride Group |
At the same time, there are those who have
already moved up a little further in their careers and have been aspiring to
buy a home for a longer time. They have been scanning the market for suitable
options and are fairly certain of what they want, and are now awaiting the
right combination of factors to help them make the final decision.
For the real estate market, this amounts to a
very large number of 'fence sitters' - people who are potential buyers but are
not committing.
The industry expectation is that after the annual
budget is announced, many of these individuals may press the 'commit' button.
This is because favourable changes in direct and indirect taxation on
individuals can induce greater financial confidence.
For example, if the finance ministry raises the
individual income tax exemption limit, it will have positive impact on
long-term spending and saving patterns. More disposable income increases
investment appetite, and property is the foremost investment instrument of
choice for every Indian,
Likewise, if the annual budget increases the tax
deduction on home loans, it becomes an additional incentive for people to buy
homes. The annual budget also impacts the financial confidence of individuals
in indirect ways.
For instance, if duties on consumer goods are
hiked, it affects how middle class people will plan their budgets for the year.
If the budget announces additional subsidies for utilities such as cooking gas,
it will translate into more disposable income.
Changes in service tax and sales tax are also
directly related to the annual expenses incurred by middle class households,
and therefore affect financial planning of families.
In short, the upcoming budget can play a big role
in moving undecided property buyers off the fence.
It is not surprising that everyone from developer
to end user will be paying close attention to what Finance Minister Arun
Jaitley has to offer this year.
About The Author ..!
Mr. Arvind Jain is Managing Director of The Pride
Group, a world-class property development conglomerate that is changing the
cityscapes of Pune, Mumbai and Bangalore.
Established in 1996, Pride Group has built and
delivered over 10 million sq.ft. of constructed area. Pride Group has recently
launched Pride World City, the 400-acre luxury mega-township at Charholi, Pune.
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