Realty wants sops, affordable housing push
Experts are calling for an increase in the price cap for affordable housing in metro cities, from ₹45 lakh to ₹1 crore, to make homes more accessible.
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Bengaluru: Following a year of exceptional sales growth for the residential sector, the real estate industry believes some additional measures could help sustain the momentum.
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Stakeholders hope the interim budget on 1 February will address their demands such as redefining affordable housing, home loan interest rate rebate, tax benefits for first-time homebuyers, and a longstanding wish of industry status.
Despite the strong home sales surge in 2023, the affordable housing segment suffered a setback as most developers focused on premium home launches.
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To help buyers in the affordable segment and with property prices in the metro cities skyrocketing, the government should raise the blanket price cap of ₹45 lakh for affordable housing, in the metros, and a further increase in Mumbai, experts said. (Affordable housing is defined as a house or apartment valued up to ₹45 lakh, with a carpet area of up to 90 square metres, located in non-metros and villages, and 60 square metres in large cities.)
“…Raising the limit from ₹45 lakh to ₹1 crore for metro city home buyers will significantly benefit the affordable housing segment, making homes more accessible," said Pritam Chivukula, vice-president of industry body Confederation of Real Estate Developers’ Association of India- (Maharashtra Chamber of Housing Industry (Credai-MCHI).
Around 476,530 residential units were sold in 2023 compared to 364,870 units in 2022, according to Anarock Property Consultants. However, the share of budget home sales has shrunk to 20% in 2023 from 35–40% before the pandemic. The segment’s share in total housing supply in top sevem cities fell to 18% in 2023 from 40% in 2019.
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Industry leaders are also batting for an increase in the deduction limit for home loan interest payments under Section 24(b) of the Income Tax Act. With the turnaround in residential sector, prices have increased, leading to homebuyers having to borrow more.
“We propose an increase in the tax rebate on home loan interest. Raising the current limit from ₹2 lakh to ₹4 lakh could be a game-changer, helping to sustain current strength in demand," said Dhruv Agarwala, group CEO, REA India (Housing.com, Pro-ptiger.com and Makaan.com).
Housing demand in the country is projected to reach 93 million units by 2036 with many smaller cities projected to spearhead both demand and supply, according to a recent report by the Credai with Liases Foras.
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Anarock chairman Anuj Puri said industry status for the housing sector, that could unlock financial advantages, and single-window clearance for residential projects have been standard asks by the sector, and stay in place this year, too.
In addition, Puri said release of land, owned by various government and other agencies such as Indian Railways, port trusts, department of heavy industries, at low cost could prove to be vital for the development of budget housing.
An expansion of the Special Window for Affordable and Mid-Income Housing or SWAMIH Fund has also been proposed to ensure the timely completion of stressed projects.
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