The sales of mid-premium residential properties (priced between Rs 1-2 crore) are expected to get a leg up with the Union Budget proposals.
As per the Budget proposal, those earning upto Rs 12 lakh in salary will pay nil income tax in the new regime. This move is expected to leave additional disposable income in the hands of taxpayers. A third of the tax relief , estimated at Rs 1 lakh crore could go into consumer expenditure and the rest into savings and investments, according to estimates.
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“I think more disposable income will augment demand for mid-premium (Rs 1-2 crore) housing segment. These are typically first-time home buyers and upgrade their homes in a few years as they move up in their career,” said Amit Kumar Sinha, managing director and CEO at Mahindra Lifespaces.
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Sinha said the premium properties (between Rs 2-5 crore) will have some impact, due to rub-off from more interest in the mid-premium segment.
Unlike affordable housing – properties priced less than Rs 40 lakh – the premium and mid premium segments have been posting good sales in recent times.
The supply of premium properties – priced over Rs 1.5 crore – increased by 24% in CY2024. The segment’s share in total launches increased to 30 % in H1 CY24 from 11% in 2019. Premium home sales increased to 26% in 2024, from merely 7 %n 2019, according to Anarock Research.
Houses priced between Rs 40 lakh and Rs 1.5 crore (mid- and premium segment) had a share of 52 % in total supply in H1 CY24 and a share of 56 % in total sales in 2024. The segment’s share in sales and launches has hovered around 49-63 % over the years.
Gulam Zia, senior executive director at Knight Frank said the combination of higher disposable income, improved sentiment due to economic stability and attractive home loan rates will encourage buyers to invest in premium and luxury segments.
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