The last two years have seen a rise in the affordable housing segment in the major cities across India. The encouragement received from the government in the form of subsidies and tax rebates have borne fruits and the sector has appeared promising.
Some of the factors that have contributed to this new era include the following:
1. Increase in the interest from development firms leading to higher number of launches
2. Increased subsidy on the housing loans such as the Credit-Linked Subsidy Scheme (CLSS) that was launched in December 2016.
3. Increase in the number of buyers who have entered into the real estate market following the creation of new loan segments.
4. Higher fund allocation for the affordable housing segment such as the one under the PMAY with 39% increase.
5. Increase in the supply of houses across the states in the country.
6. Infrastructure status given to affordable housing is boosting the interest of developers.
7. The scope of better access to funding avenues for the affordable housing segment.
These factors have contributed to a balanced demand and supply. It is likely that in the near future there will be 20,000 more affordable housing units added in Gurugram alone. The growth potential appears huge and the queries have proportionately increased.
Under the CLSS, the beneficiaries can have access to an interest subsidy of 4% and 3% depending upon their income segments. What’s more, builders have been receiving tax benefits! In addition, if the government is able to reduce the GST levied on affordable housing to 8%, more developers would enter into the picture.
The new era in affordable housing is likely to benefit people across class lines and the right land allocations will change the future of the real estate sector.