CREDAI Voices Disappointment Over Union Budget's Lack of Support for Affordable Housing Initiatives

The Confederation of Real Estate Developers' Associations of India (CREDAI) expressed dissatisfaction with the Union Budget's lack of incentives for affordable housing. Representing around 15,000 developers nationwide, CREDAI warned that the share of affordable housing in new home launches might decrease further. Despite this, the association appreciated the government's focus on infrastructure development, which could benefit the property sector.

CREDAI National President Shekhar Patel voiced disappointment over the absence of concrete measures for affordable housing in the Budget. He noted that with the current outdated definition, affordable housing's share could drop from 18% to about 12% of total housing supply. This concern is shared by realtors' bodies CREDAI and NAREDCO, who have been advocating for a revision in the definition by raising the price cap from Rs 45 lakh to Rs 80-90 lakh.

Affordable Housing Concerns

The Goods and Services Tax (GST) on affordable housing stands at 1%. Both CREDAI and NAREDCO believe that increasing the price cap would benefit potential homebuyers. They have also sought tax incentives for developers to encourage more construction in this segment. Patel highlighted that affordable housing is not merely a welfare scheme but a crucial part of economic infrastructure, driving employment, consumption, and social stability.

Rising construction costs and land prices are deterring developers from focusing on affordable housing without adequate policy support. Patel warned that if this trend continues, it could lead to higher rents, longer commutes, and an increase in informal housing. CREDAI has urged the government to prioritise policies for affordable housing to ensure inclusive and sustainable urban growth.

Infrastructure Investments

Real estate consultant Anarock Chairman Anuj Puri also expressed disappointment over the lack of direct announcements regarding affordable housing, especially concerning definition changes or fiscal support. He emphasised its significance for urban housing supply and inclusive growth. Meanwhile, CREDAI praised the government's ongoing commitment to infrastructure spending as a positive development for the real estate sector.

Investments in highways, metros, logistics corridors, railways, and urban infrastructure are expected to enhance connectivity and open new growth corridors. These developments will support long-term urban growth. Additionally, CREDAI welcomed efforts to improve ease of doing business through faster approvals, simplified processes, and increased digitisation.

Such measures can significantly reduce project timelines and holding costs, benefiting both developers and homebuyers. The association believes these steps will ultimately contribute to a more efficient real estate market.

With inputs from PTI