Feel good factor from GST rate cut, housing demand to rise during festivals: CREDAI

Singapore, Sep 12 (PTI) Indian government's decision to cut GST rates on various products will increase purchasing power of consumers and boost demand for residential properties in the upcoming festive season, according to realtors' body CREDAI.

The association, which has a 13,000 members from across India, said the construction cost is expected to come down because of reduction in GST rates on cement and few other building materials.

The association, which is organising its annual event CREDAI-NATCON here, asserted that the benefit of GST rationalisation would be passed on to customers, provided cement companies and other manufacturers of building materials bring down their rates.

New GST rates are applicable from September 22. Addressing a press conference on late Thursday, CREDAI Chairman Boman Irani said, "GST rationalisation has generated feel good factor among people. There is a positive sentiment among consumers, which is a good sign ahead of festival season".

CREDAI President Shekhar Patel said the reduction in GST rates, coupled with tax incentives in Budget 2025 and reduction in repo rates by the RBI, would give a huge filip to housing demand.

He said the housing sales in the first six months of 2025 rose in value terms but there was a decline in terms of number of units sold.

Patel, however, said the strong economic growth in the June quarter of this fiscal and other policy initiatives would enhance housing demand in the coming months.

The President reiterated the industry's long pending demand that the price cap of Rs 45 lakh in the definition of affordable housing should be raised in line with market realities.

The GST on affordable housing is only 1 per cent, while the properties above Rs 45 lakh attracts 5 per cent GST.

Patel also pointed out that there is a total 35-45 per cent taxes on real estate sector from both Centre and state governments and said there is a need to reduce this burden.

"If the taxes are reduced, the selling price of properties will come down," he said.

More than 1,000 members from different states in India is attending this conference. PTI MJH DR DR