The impact of the epidemic on the target audience for this segment has been particularly dire with regard to affordable housing.The much-discussed category of affordable homes saw a drop in overall sales, according to Anarock research, from over 30% in 2022 to roughly 20% in 2023, and from nearly 40% in the period prior to the pandemic.Not surprisingly, the share of this segment in the top seven cities’ total housing supply decreased from nearly 40% in 2019 to 18% in 2023.In the last year or two, a number of interest stimulants that were previously available to developers and customers in this market have expired.Experts say that in order to entice developers to build more affordable housing and to enable consumers to purchase such homes, it is essential to revive and expand substantial benefits, such as tax breaks.
Change The Affordable Housing Qualification Requirements To Allow More Purchasers To Claim The Extra Deductions
According to the Ministry of Housing and Urban Poverty Alleviation, the price, size, and buyer’s income all play a role in determining what constitutes affordable housing.In non-metropolitan cities and villages, affordable housing is defined as a house or flat valued up to Rs 45 lakh with a carpet area of up to 90 square metres, or 60 square metres in large cities.On the other hand, the central bank’s definition is predicated on the loans that banks give to people so they can buy homes or apartments.
The government must carefully consider changing the minimum price at which properties in the cities’ affordable housing market qualify. Despite the units’ defined size of 60 square metres being reasonable, a significant portion of the target clientele cannot afford them due to prices as high as Rs 45 lakh.For instance, in a city like Mumbai, a budget of less than Rs 45 lakh is insufficient; it ought to be raised to at least Rs 85 lakh. For other major cities, the budget should be increased to at least Rs 60–65 lakh.More buyers will be able to afford more homes thanks to this price adjustment, and they will also be eligible for additional benefits like government subsidies, lower GST rates (to 1% without input tax credit), etc.
Give up government land to build affordable housing
It’s also essential to address the land scarcity for this important housing market segment. The corresponding government agencies may release certain lands owned by the Indian Railways, port trusts, departments of heavy industries, etc. Significantly lowering real estate prices overall will also result from the release of this land at a reduced cost, especially for affordable housing, Puri continued.
