Affordable housing needs government push, say realtors

financialexpress.com:

With affordable housing losing its sheen in the past couple of years, top property realtors believe that intervention from government, in terms of subsidy schemes for borrowers or reduction in interest cost for land acquisition is the only way to revive interest in it.

In the past couple of years, the share of affordable housing among total sale of properties has been consistently falling. In 2020, it constituted of 39% of total sales. This number has dwindled to 19% in 2023, according to data from Anarock Property.

Pavitra Shankar, managing director, Brigade Enterprises said that they will look at launching new affordable projects if government comes out with new incentives for the segment. “There is definitely a need for government intervention in the form of incentives for developers, if the affordable housing segment is to grow significantly,” Shankar said.

With land prices in both metro and non-metro cities on the rise, along with input costs of construction material, it makes it highly challenging for builders to create viable projects in segment. Also, the cap the Rs 45 lakh for buyers to take advantage of the earlier-introduced subsidy scheme (credit-linked subsidy scheme) was also an impediment, added Shankar.  

In addition, the withdrawal of Section 80-IBA (5) where developers were allowed a deduction of 100% of the profits derived from such projects, subject to certain conditions was not extended beyond March 21. This also led to builder disinterest.

Added Niranjan Hiranandani, managing director of Hiranandani group said without CLSS, affordable housing would be hit. “We have to understand that interest on housing loans has gone up from 6.5% to 8%. During the CLSS days, buyers were getting loans at 5%. I feel