Singapore, September 12 (PTI) – The Indian government's recent decision to reduce GST rates on a variety of products is poised to enhance consumer purchasing power and stimulate demand for residential properties in the forthcoming festive season, according to the real estate association CREDAI.
Representing 13,000 members nationwide, the association indicated that the costs of construction are likely to decline due to lower GST rates on cement and several other building materials.
During its annual CREDAI-NATCON event in Singapore, the association affirmed its commitment to passing on the benefits of GST rationalization to customers, contingent on cement companies and other building material manufacturers lowering their prices.
The new GST rates will take effect on September 22. Addressing a press conference late Thursday, CREDAI Chairman Boman Irani commented, "GST rationalization has generated a feel-good factor among people. There is a positive sentiment among consumers, which is a good sign ahead of the festival season."
CREDAI President Shekhar Patel remarked that the reduction in GST rates, alongside tax incentives introduced in Budget 2025 and a reduction in repo rates by the RBI, is expected to significantly boost housing demand.
He highlighted that while housing sales increased in value during the first half of 2025, there was a decline in the number of units sold.
Nonetheless, Patel expressed optimism that strong economic growth in the June quarter of the current fiscal year and further policy initiatives will enhance housing demand in the coming months.
The President reiterated the industry's longstanding call to adjust the Rs 45 lakh cap in the definition of affordable housing to reflect current market conditions.
Currently, GST on affordable housing is set at only 1%, whereas properties costing more than Rs 45 lakh attract a 5% GST rate.
Patel also highlighted the overall tax burden on the real estate sector, which totals 35-45% from both central and state governments, calling for a reduction in this financial load. "If the taxes are reduced, the selling price of properties will come down," he said.
Over 1,000 members from various states across India are participating in this conference.
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