Infrastructure and REITs developments to boost affordable housing sector

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Investors have shown much enthusiasm about the real estate sector and since May the S&P BSE Realty Index has risen thrice due to the current ruling partys focus on providing affordable housing.

DLF Ltd stated that tax breaks for residential property with less than 1000 square feet would prove to be an advantage. As the government cannot reduce tax collections, a suggested viable option is to lower tax benefits on rental assets and increase tax breaks for first-time home purchases.

Infrastructure is also a main concern as there has been stress on fund resources, relaxed foreign direct investment (FDI) limits and capital asset investment such as malls and IT parks.

REITs or real estate investment trusts are also important to consider as these have higher unit value than mutual funds and invested in operating and income-generating real estate assets. Experts believe that such measures could allow for re-rating of sector as whole.