Introduction
While the Interim Union Budget 2024–25 will be announced today, the Finance Minister has set the threshold limit at Rs. Real estate traders feel that the increase from 45 lakhs will give a boost to this sector. Developers are also seeking to increase the area limit for affordable housing units in terms of space.
Interim Budget 2024
According to a property consultancy study, the affordable housing category, which accounted for more than 30 percent of total sales in 2022, will decline to around 20 percent in 2023. The developers are expected to complete the necessary amendments by the interim budget of 2024.
Housing construction in metro areas
The amendment to the definition of affordable housing has long been pending among real estate developers and home buyers. Vihang Sarnaik, director of Vihang Group, said that the finance minister intends to establish an affordable housing index for each tier-1 and tier-2 city separately to give impetus to housing construction in metro areas.
As per housing scheme, the limit is Rs. 45 lakhs
It is crucial to include important factors like inflation, land prices, construction costs, approval prices, and labor costs to define affordability in housing.
“For example, in the case of Mumbai, housing costs are particularly high. Budget-friendly home prices range from Rs. 45 lakhs to Rs. 90 lakhs, and the overall affordable scheme benefits reach its intended audience. As per the current affordable housing scheme, the limit is Rs. 45 lakhs. You won’t find a single house in Mumbai at such a low price,” he said.
National Real Estate Development Council (NAREDCO) Maharashtra president Sandeep Ranwal also expressed similar concerns. He said there is a need to redefine the definition of affordable housing to increase demand in the NAREDCO sector.
Earlier in November 2023, Dinesh, Economic Adviser to the Ministry of Housing and Urban Affairs said. Kapila also said it was unrealistic to categorize affordable housing into units up to Rs 45 lakh as the cost of land in cities is high. He said that a proposal has been sent to the Finance Department to improve the definition of affordable housing. Experts say that it should be fixed at 75 lakhs.
Conclusion
The definition of affordable housing has long been pending between real estate developers and home buyers. The current limit is Rs. 45 lakh is unrealistic for metro areas like Mumbai, where housing costs are much higher. The finance minister has set the threshold limit at Rs. 75 lakhs in the Interim Union Budget 2024–25, which is expected to increase the demand for affordable housing units. Your story starts here on OpenPlot. We are glad to be a part of it. Welcome to the world where your ideal home is just a click away!
Also read: Budget 2024: Amendments in Real Estate Affordable Housing Price Bands