The government is reportedly contemplating a proposal to increase the price limit for categorizing homes as "affordable housing" in cities such as Delhi and Mumbai. The current price cap for homes classified as affordable housing is set at Rs 45 lakh. The new proposal aims to raise this price limit to Rs 75 lakh, which would potentially expand the scope of affordable housing and make it accessible to a wider range of homebuyers in these cities.
“Classifying affordable housing as units up to Rs 45 lakh is unrealistic given the high price of land in cities, Dinesh Kapila, Economic Advisor at the Ministry of Housing and Urban Affairs (MHUA) said on Friday.
“In response to the industry's call for improving the definition of affordable housing, a proposal has been forwarded to the Union Finance Ministry. We are particularly concerned about high land prices in metropolitan cities like Delhi and Mumbai, which make the current price range for affordable houses of less than Rs 45 lakh inadequate.
“We have requested the Finance Ministry to consider raising this threshold to at least Rs 75 lakh,” Kapila said while speaking at the 12th Real Estate Conference and Excellence Awards programme, organised by the Associated Chambers of Commerce and Industry of India in Delhi.
Being classified under the affordable housing segment offers several benefits to buyers, including access to various government incentives and easier availability of loans. This move to increase the price limit to Rs 75 lakh is aimed at making these incentives and benefits more accessible to a broader range of homebuyers in cities like Delhi and Mumbai.
Additionally, the real estate sector in India is expected to experience significant growth, with its size projected to reach approximately $1 trillion by the end of 2030. Furthermore, the real estate sector's contribution to the country's GDP is expected to reach around 13 percent by 2026. This indicates the sector's potential as a major driver of economic growth in India.
The Real Estate (Regulation and Development) Act, 2016 (RERA) has played a crucial role in the industry's development. Since the enactment of RERA, nearly 86 percent of projects nationwide have been successfully delivered to homebuyers, marking a significant achievement in addressing long-standing issues within India's real estate sector. RERA is considered a landmark legislation that has been instrumental in addressing and rectifying problems that have historically affected the country's real estate market.
(With Agency Inputs)
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