Affordable Housing for All was first carved as an objective in the National Urban Housing and Habitat Policy (NUHHP), 2007 of India. It rose to prominence in the aftermath of the Global Financial Crisis (GFC) of 2008 when muted real estate demand and the economic slowdown prompted Indian real estate developers to focus on affordable housing. However, the biggest boost came when the Government of India launched the Pradhan Mantri Awas Yojana (PMAY) – Urban in June 2015.

*Tax benefits: extension by one year of additional deduction of up to INR 1,50,000 for interest paid on loans taken for purchase of an affordable house on or before 31st March, 2020; extension by one year of tax holiday provided on the profits earned by developers of affordable housing project approved by 31st March, 2020. Affordable housing in India is defined as a house or a flat with carpet area up to 90 square metres in non-metropolitan cities and towns, and 60 square metres in metropolitan cities and having value up to Rs 45 lakh, for both. The Government and the Reserve Bank of India (RBI) have taken numerous measures to give a boost to this sector over the past few years.

Affordable housing is also included under RBI’s priority sector lending programme. Driven by numerous incentives, the sector witnessed significant growth in supply during 2016 and 2017. The share of Rs sub-5 mn ticket size segment in total launches grew from 51% in H1 2016 to 70% in H1 2017 as developer interest in the affordable housing segment increased.

The joint efforts of government agencies to incentivise affordable housing have generated positive outcomes on the supply side. It is expected that this sector along with Neo affordable housing will recover faster post COVID-19.

Source: www.financialexpress.com