Affordable Housing Incentives Key to Boosting India’s Property Market: Report
43% of total home sales across India’s eight major housing markets fell within the Rs 45 lakh price range, a key ceiling for qualifying for some government home buying subsidies in India.
Government policy support has fueled the appeal of affordable housing in India in 2021. This, in turn, has helped the second most populous country in the world to record an increase in annual housing sales as well as supply. , according to PropTiger.com.
In fact, 43% of total home sales across India’s eight major housing markets fell within the price range of Rs 45 lakh, an essential ceiling for qualifying for some government home buying subsidies 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 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 across these markets against 1.22 lakh units. the previous year, posting an increase 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 during the year. We expect more activity in the housing market in 2022, especially in the affordable housing segment, as various deadlines for qualifying for government subsidies are nearing the end,” said Dhruv Agarwala, Group CEO, Housing.com, PropTiger.com & Makaan.com.
“Given that the affordable housing segment is very crucial for 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 the second largest sector generating jobs in India,” 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,” Ankita said. Sood, Manager and Research Housing.com, PropTiger.com & Makaan.com.