In the aftermath of the pandemic and with signs of green shoots in the economy, the Union Budget 2023 was one event that the real estate sector was looking forward to. The pandemic had put a pause on people's home buying aspirations and site visits, but data indicates that confidence of home buyers is returning back.

As per a report, residential housing demand in the top eight cities of India increased by over 15 per cent.

In India, real estate investment has always remained as one of the preferred choices of investment, and with the 2023 Union Budget giving significant relief in personal taxes, experts believe that demand for housing is only set to increase going forward.

Since the last eight years, income tax slabs have not changed, so homebuyers had expected a considerable relaxation of tax benefits in home loans. Also, the recent rise in interest rates following an increase in repo rates by the Reserve Bank of India had also forced many to put a lid on their property buying decisions.

In order to increase middle-class buying power, FM in the Union Budget said the income tax rebate threshold has been increased from Rs 5 lakhs to Rs 7 lakhs.

Middle-class citizens will benefit from this move, which will encourage them to invest in real estate. In Tier 2 and Tier 3 cities, people with higher disposable incomes will have an easier time buying a home, which in turn will boost housing demand and market growth.

Furthermore, the budget also gives a big push to affordable housing and the development of infrastructure in urban areas. The increased allocation made towards the Pradhan Mantri Awas Yojana PMAY comes as a big boost to the affordable housing segment of the Indian real estate market.

The government has raised the budget for PMAY by 66 per cent to around Rs 79,000 crore. Despite missing its 2022 target, the Centre is striving to achieve 'Housing for All' by 2024. According to the ministry of housing and urban affairs, more than 1.20 crore houses have been sanctioned under PMAY, of which more than 64 lakh have been completed.

The PMAY scheme was launched in 2015 with an aim to provide 'pucca houses' with basic amenities to all eligible urban beneficiaries.

As the government continues to focus on urban planning reforms, it has allocated Rs10,000 crore to the National Housing Bank, Rs2.4 lakh crore for railways, and increased connectivity through 50 more airports to boost affordable regional connectivity.

This is expected to drive up the price of the proposed sites and drum up real estate potential for not only residential properties but also commercial, warehouse, retail, and other segments as well. The FM also said all cities and towns would be able to convert 100 per cent of their sewers and septic tanks to machine holes.