Affordable Housing Incentives Key to Boosting India’s Property Market: PropTiger.com Report

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Affordable Housing Incentives Key to Boosting India’s Property Market: PropTiger.com Report

Posted on March 15, 2022

Government policy support is expected to fuel the appeal of affordable homes in India in 2021, according to data from digital real estate brokerage firm PropTiger.com. This, in turn, has helped the world’s second most populous country record an increase in annual home sales as well as supply.

According to figures available from PropTiger.com, a leading online real estate brokerage firm, 43% of total home sales across India’s eight major property markets were in the Rs 45 lakh price range, a critical ceiling for qualify for certain government grants on buying a house in India. According to a report by PropTiger, titled Real Insight Residential – Annual Round-up 2021, home sales in India’s eight major housing markets increased by 13% in 2021, compared to overall sales in 2020.

Under Section 80EEA of its Income Tax Act, India offers its first-time buyers an additional tax deduction of Rs 1.50 lakh if ​​the unit is worth up to Rs 45 lakh. Such a borrower can also apply for a grant under the government’s Pradhan Mantri Awas Yojana (PMAY) scheme.

In a country where home ownership has traditionally been important to families, the concept has gained popularity following the coronavirus pandemic, where the importance of one’s home as the only true haven of peace has become apparent. During the pandemic, even young millennials and Gen Z, who are more inclined towards rental properties, have recognized the value of home ownership.

According to PropTiger.com, the price range of up to Rs-45-lakh also contributed 41% to the annual new supply in these eight markets in 2021. A total of 2.14 lakh units were launched in 2021 in these markets compared to 1.22 lakh units the previous year, posting a rise of 75%.

The residential markets covered in the analysis include Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Delhi-NCR (Gurugram, Noida, Greater Noida, Ghaziabad and Faridabad), MMR (Mumbai, Navi Mumbai & Thane) and Pune.

“In addition to government subsidies, record interest rates on home loans were also a big driver of home sales in the country in 2021, even as the economy slowly recovered from the shock of the second wave of the coronavirus. pandemic over the course of the year. We expect to see more activity in the housing market in 2022, particularly in the affordable home segment, as various deadlines for qualifying for government subsidies draw near to an end,” said Mr. Dhruv Agarwala, Group CEO, Housing.com, PropTiger.com & Makaan.com.

“Given that the affordable housing segment is extremely crucial to the overall growth of the housing sector in India, we hope that the government will consider extending these deadlines to maintain the momentum of recovery in India’s second largest job-creating sector. “, said Mr. Agarwala added.

“The expenditure of Rs 48,000 crore by the central government to increase supply in the affordable housing segment in rural and urban areas is a welcome step that will accelerate the vision of ‘housing for all’. However, in addition to stimulating supply, there is also a need to stimulate demand in the segment through tax refunds, stamp duty exemptions and increasing the cap on houses to be considered as affordable homes in metropolises to further entice home buyers. said Ms. Ankita Sood, Manager and Research of Housing.com, PropTiger.com and Makaan.com.

Penny D. Jackson