GST reforms can Boost Realty Sector

Realty firms excited by GST reforms, expect decline in housing prices and increased demandJLL Chief Economist Dr. Samantak Das said that housing prices could decline by 1 to 1.5 percent depending on the type of project and savings in cement costs.

Real estate companies have welcomed the GST Council's reforms. They hope this will increase buyer affordability, leading to increased housing demand. Lower raw material costs will also help developers and increase project completion rates. The Council has reduced the GST rate on cement from 28 percent to 18 percent. The rate on sand-lime bricks or stone inlay work and granite blocks has been reduced from 12 percent to 5 percent. JLL Chief Economist Dr. Samantak Das said that housing prices could decline by 1 to 1.5 percent depending on the type of project and savings in cement costs.

Kamal Khaitan, Chairman and Managing Director of Sunteck Realty, said, "This reduction in GST on cement and other construction materials is a major step that will directly reduce construction costs. This reduction will enable developers to maintain price stability and benefit homebuyers through improved affordability. This will also promote better project economics and increase investment in housing and urban infrastructure."

Cement accounts for 4 to 5 percent of total construction costs, while the overall construction material component accounts for 25 to 30 percent. According to Akash Farande, Managing Director of Farande Spaces, these reforms could reduce developers' input costs by approximately 10 percent.

Industry experts believe that the affordable and mid-income segments are likely to benefit the most from the government's move. Dr. Niranjan Hiranandani, Founder and Chairman of the Hiranandani Group, said, "Affordable housing will particularly benefit as the benefits of reduced construction costs can be passed on to homebuyers. This will make housing more accessible." It will also support the government's "Housing for All" vision.

Pradeep Aggarwal, Founder and Chairman of Signature Global (India), believes that these reforms are significant in view of the upcoming festive season. He said, "These will ultimately reduce housing prices for consumers and create sustainable demand across all segments."

Mahendra Nagaraj, Vice President of M5 Mahendra Group, said that these reforms will have a direct impact on operating margins and provide flexibility in project budget management. This will allow for better procurement, faster execution, and more competitive pricing, especially in price-sensitive urban markets. The GST amendment is expected to increase savings, boost consumption, improve liquidity, and boost business morale.