Affordable housing stocks surge ahead of Budget; HUDCO, Can Fin Homes, Aadhar Housing surge up to 3%

Sectors like construction, auto, FMCG, and IT powered the Nifty 50's gains.

Affordable housing stocks were abuzz with activity just a day ahead of the 2025 Union Budget presentation on January 31. Shares of key players like HUDCO, Aadhar Housing Finance, Can Fin Homes, Home First Finance, and GIC Housing Finance climbed as much as 3 percent, reflecting market anticipation for budgetary measures aimed at improving housing affordability and strengthening infrastructure development across India.

Industry experts are advocating for an upward revision in the property value cap under the Pradhan Mantri Awas Yojana (PMAY), proposing an increase from the current Rs 35 lakh to Rs 50 lakh in metropolitan areas. This adjustment, they argue, would better reflect escalating housing costs and expand the pool of urban homes eligible for the “affordable” classification.

By doing so, both homebuyers and developers could leverage PMAY subsidies and tax incentives, fostering greater participation in the urban affordable housing sector.

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Analysts at Axis Securities highlight that raising this cap to Rs 50 lakh could alleviate financial strain, particularly for first-time buyers in high-cost metro regions where hefty EMIs pose a significant burden. By effectively reducing the overall cost of homeownership, the move could make housing more accessible to a wider segment of the population.

Additionally, industry stakeholders are pushing for dedicated tax relief under Section 80C of the Income Tax Act. Presently, Section 80C provides a combined deduction limit of up to Rs 1.5 lakh per year for various expenses and investments, including home loan principal repayments. A targeted provision for affordable housing could offer further financial relief to aspiring homeowners.

Historically, government-backed initiatives such as PMAY’s “Housing for All” mission and the SWAMIH scheme have played a crucial role in reviving stalled projects and propelling the affordable housing segment forward.

Market watchers believe the upcoming budget could build upon these existing frameworks, introducing refinements to PMAY-HFA to ensure a more robust affordable housing ecosystem. Proposed measures such as reduced stamp duty and the reinstatement of the Credit-Linked Subsidy Scheme (CLSS) under PMAY could provide further momentum to homebuyers in this segment, fueling optimism across the industry.

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