The Confederation of Real Estate Developers Associations of India (Credai) has formally approached NITI Aayog, advocating for specific policy adjustments aimed at revitalizing the affordable housing sector. According to Shekhar Patel, the president of Credai, this initiative includes redefining what constitutes affordable housing to better align with varying land and home prices across different markets. During a recent presentation to the government think tank, Patel emphasized the need for affordable housing to be recognized as core infrastructure, similar to frameworks in countries like China and the United Kingdom. This classification could facilitate the unlocking of funds essential for housing development, which is increasingly critical in the face of demographic changes and urbanization.
One of the significant challenges identified by Credai is the inconsistent definition of affordable housing across national and state regulatory frameworks. Currently, the Centre defines affordable homes as those priced at Rs 45 lakh or less. However, this threshold does not account for regional variances in property prices, which can significantly impact housing affordability in different markets. Credai's proposal for a new, more flexible definition aims to reflect the realities of local real estate conditions, thereby enhancing the accessibility of housing for potential buyers.
In addition to their discussions on policy revisions, Patel expressed concerns regarding the Union Budget's impact on the real estate sector, describing it as increasingly becoming a 'non-event' for housing. He noted that while there have been reforms in the corporate and income tax regimes, expectations for real estate, particularly in the affordable segment, remain unfulfilled. Credai is advocating for the reinstatement of the input tax credit mechanism under the Goods and Services Tax (GST) framework, alongside targeted measures to stimulate the construction and purchasing of affordable homes, which have been sidelined in recent years. A proposed credit guarantee scheme for affordable housing could potentially provide first-time homebuyers with access to more affordable loans, further stimulating demand.
As the industry adjusts to evolving market dynamics, Patel noted that in 2025, only 27 percent of homes sold fell into the affordable category, a significant drop from around 60 percent pre-COVID-19. This shift has been attributed to a decrease in the supply of affordable housing, a growing preference for larger homes, and first-time buyers hesitating to enter the market. Looking ahead, Patel pointed to the upcoming Commonwealth Games in Ahmedabad in 2030 and the city's bid for the 2036 Summer Olympics as potential catalysts for real estate growth. He anticipates that the proposed Rs 1 lakh crore investment in infrastructure will have a positive ripple effect on the real estate sector, offering new opportunities for development and growth in the affordable housing market.