GST cuts to boost consumer durables, affordable housing could gain later: Sunil Subramaniam

The recent GST cuts on textiles and footwear priced below Rs 2,500 are expected to provide some relief to consumers, but the real demand surge may come from big-ticket categories such as durables, autos, and real estate, according to market expert Sunil Subramaniam.

Speaking to ET Now, Subramaniam said that while the GST cut will encourage some immediate purchases in low-cost segments like footwear and textiles, the absolute savings in rupee terms are limited. “At the lower end, people may advance their replacement cycles slightly, but the bigger impact will be seen in EMI-based purchases such as consumer durables, automobiles, and even real estate,” he explained.

Festival season to drive big-ticket buys

With the festive season approaching, Subramaniam expects demand to rise in discretionary and durable categories where EMIs influence consumer decisions. “Festivals are associated with big purchases—cars, refrigerators, air conditioners. Savings from GST cuts on low-end products will likely be redeployed towards higher-value EMI-based products,” he said.

He noted that categories like air conditioners, large TVs, and high-end consumer durables, which have seen GST reductions from 28% to 18% or even 12% to 5% in some cases, will benefit the most.

Real estate outlook: Short-term weakness, Long-term opportunity

On the real estate sector, Subramaniam maintained a contrarian view, highlighting that the current slowdown is seasonal and structural. “Monsoons reduce construction activity, which naturally dampens demand in this period. Moreover, affordable housing has lagged, while premium housing has seen more traction,” he said.

Builders, he pointed out, have shifted focus towards high-end properties in recent years, leaving affordable housing under-served. However, with GST cuts in cement and lower EMIs supported by rate cuts, Subramaniam expects affordable housing demand to revive over the next 6–12 months.

“The real estate sector needs time to realign—developers have to acquire land, plan, and launch affordable projects. By the second half of the year, supported by lower EMIs and GST benefits, affordable housing could see a boom,” he added.

Longer-term market play

Despite near-term underperformance of real estate stocks compared to the consumption pack, Subramaniam believes this is the time to buy on dips. “Do not expect an immediate bounce back, but in the medium to long term, the combination of GST cuts and lower interest rates will make real estate, especially affordable housing, an attractive play,” he said.

In summary, GST 2.0 is likely to create a two-speed recovery: immediate traction in consumer durables and discretionary goods, followed by a longer-term revival in affordable housing.