As many as 43 percent of the total housing sales in India’s eight leading housing markets were in the price range of Rs 45 lakh. This segment also contributed to 41 percent to the annual new supply in 2021, a new report has said.
Policy support from the government is fuelling demand for affordable homes in India, as per data shared by digital real estate brokerage firm PropTiger.com.
The price range of Rs 45 lakh is a cap essential to avail certain government subsidies on home purchases in the country.
According to PropTiger.com, the price bracket of upto Rs 45 lakh also contributed 41 percent 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 in the preceding year, showcasing an upward swing of 75 percent.
The report titled 'Real Insight Residential – Annual Round-up 2021', also said that home sales in India’s eight prime housing markets increased 13 percent in 2021, when compared to the overall sales in 2020.
Under Section 80EEA of its income tax law, first-time homebuyers receive an additional tax deduction of Rs 1.50 lakh if the unit is worth up to Rs 45 lakh. Such a borrower can also claim subsidy under the government Pradhan Mantri Awas Yojana Programme (PMAY).
In a country where housing ownership has traditionally been important for families, the concept has gained further currency after the coronavirus pandemic where the importance of one’s home became evident. During the pandemic, even the younger millennials and Gen Z, who are more inclined towards rental properties, recognised the value of home ownership.
The residential markets covered in the analysis include, Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Delhi-NCR (Gurugram, Noida, Greater Noida, Ghaziabad and Faridabad), MMR (Mumbai, Navi Mumbai and Thane) and Pune.
“In addition to government subsidies, record low home loan interest rates too, have been a great driver of home sales in the country in 2021 even as the economy slowly recovered from the shock of the second wave of the pandemic during the year. We expect to see more intense activity in the housing market in 2022 especially in the affordable homes segment as various deadlines to avail of the government subsidies near the end,” said Dhruv Agarwala, Group CEO, Housing.com. PropTiger.com and Makaan.com
“In light of the fact that the affordable housing segment is highly crucial for the overall growth of the housing sector in India, we hope that the government considers extending these deadlines to maintain the recovery momentum in India’s second largest employment generating sector,” said Agarwala.
“The Central government's Rs 48,000 crore outlay to augment the supply in the affordable housing segment in both rural and urban areas is a welcome step which will accelerate the vision of ‘Housing for all’. However, apart from boosting the supply, there is also a need to boost the demand in the segment through tax rebates, stamp duty waivers and by increasing the capping for homes to qualify as affordable homes in metro cities to further incentivize homebuyers,” said Ankita Sood, head and research, Housing.com, PropTiger.com and Makaan.com.
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