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  • MODERATOR:

    Hello and welcome to the chat with Abhishek Goenka, Partner, PwC, on what real estate should expect from Budget 2017 after demonetisation and RERA


    ABHISHEK GOENKA:

    Hello, everyone


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    BHAVESH

    Will GST impact RE industry? and we heard that high level of black money part of RE industry and local contractor so in such a circumstances would be RE industry right choice for investor?

    ABHISHEK GOENKA

    GST should have an overall positive impact on the RE Sector. The duplicity of VAT and Service Tax will be eliminated under GST. However, some of the restrictions on credits that are in the model draft law need to be addressed and there should be a seamless flow of credits in order for the sector to truly benefit.


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    BHAVESH

    What can we expect for FDI in RE industry? Would it be positive or will go down, and how?

    ABHISHEK GOENKA

    FDI in the sector is already liberal and global investors are once again looking at India favourably.


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    SOHAIL

    How do you see the recent M&A activity in the real estate sector? Case in point: Proptiger's acquisition of Housing.

    ABHISHEK GOENKA

    M&A and consolidation will be driven by RERA. Smaller developers will also enter into collaborations and joint developments with larger players. The M&A in the on-line space reflects trends of the start up and ecommerce sector and less of the RE sector.


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    PRITAM

    As a buyer looking for self-use apartment in Noida, should I wait for property prices to fall?

    ABHISHEK GOENKA

    We are not able to comment on specific investment queries


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    ASHISH

    What has been the impact of demonetisation on the real estate sector? Is it true that developers have been so hard hit that some might soon be out of business?

    ABHISHEK GOENKA

    In my view demonetization has an impact across sectors and RE is certainly impacted. The drop in consumer spending and the sentiment to not make big spending decisions is impacting sales in the sector.


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    PRACHI KEDIA

    How long do you think will the slowdown in real estate persist?

    ABHISHEK GOENKA

    2017 will continue to see some lull for the residential sector. As some of the existing inventory is liquidated and investors get the confidence back, the sector will pick up. There is a real demand for housing and the fundamentals are strong.


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    PRASAD

    Hi, Mr Goenka. Would it be wise to invest in Tier-2 cities rather than big ones? I stay in Delhi but want to invest in smaller cities like Gandhinagar or Noida. Will the Budget do anything that would help on this front? My concern is the low quality of life in overcrowded big cities and the unrealistic property prices here.

    ABHISHEK GOENKA

    The Budget is expected to increase the deduction for interest payments and also reintroduce the standard deduction. These should make the effective cost of borrowing cheaper. With fall in interest rates also, this would overall augur well for home buyers.


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    CHETAN BISWAS

    Is real estate expecting any change in tax deduction limit on housing loans and how will it impact the buyers?

    ABHISHEK GOENKA

    Yes, we expect that the limit of Rs 200,000 should be increased to Rs 500,000. This should positively impact the sector. Additionally, for first time home buyers below 30 years, we expect some additional relief.


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    GUNJAN PIPLANI

    What can the real estate allied sectors expect from the Union Budget?

    ABHISHEK GOENKA

    There are some further changes expected for REITs. On the personal front, the deduction for interest on self occupied property will increase. It can go up to Rs 5 lakhs.


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    SUREKHA

    How do you find other global property markets different from India?

    ABHISHEK GOENKA

    As a per a recent survey done by PwC and ULI, Bangalore and Mumbai are the top markets in the APAC region. As far as commercial and retail is concerned, India is just seeing the beginning of a maturing market and with REITs coming in, there should be transparency and investor confidence will increase.