Housing Trend: How Affordable Housing Is Reviving Indian Real Estate?

For the battered Indian real estate, affordable housing seems to be the only saviour at the moment and is leading the sales, increasingly every passing quarter. As per data from real estate consultancy Liases Foras, more than half of the houses sold in the December 2018 quarter was found to be under the Rs 50 lakh bracket.

In fact, one in every two houses sold in the December 2018 quarter was under the Rs 50 lakh bracket. The push from government and the lower price tag has laced this category in the forefront, bypassing the premium and luxury projects whose share decreased drastically from 29 per cent in 2016 to 12 per cent in the third fiscal quarter of 2018, Business Today reported.

PM Awas Yojna (PMAY) is seen to be playing a pivotal role in the rise of the popularity of affordable housing. Under the scheme, households with an annual income of up to Rs 18 lakh can avail Rs 2.3 lakh upfront subsidy for a home. Buyers are also eligible for income tax exemption on housing loans.

Apart from the government’s push to the buyers, the realtors and developers are also tuning in with the housing trend as under Section 80-IAB, developers get 100 per cent deduction on profits generated from an affordable housing project for flats up to 30 sq metres in the four metros cities and 60 sq. metres in other cities.

51 percent of the new launches in the December quarter happened in the cost bracket of under Rs 50 lakh. This comes as quite a contrast as until about three years back, builders were seen more focused to cater to the premium and luxury segment.

The industry leaders reportedly agree that affordable housing has arrived in India and is here to stay for a while.

“The Government has set the ambitious goal of ‘Housing for All’ by 2022 to create a housing revolution. With this, India has ramped up massively on the affordable housing segment, and this shall be leading the space in Indian real estate for the next couple of years,” said Dr Niranjan Hiranandani, CMD of Hiranandani Communities and National President, NAREDCO.

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