- CREDAI seeks incentives, revised definition for affordable housing.
- Demands removal of the Rs 45 lakh cap due to high costs
- Affordable housing share dropped to 14% of total sales.
Realtors' apex industry body CREDAI on Friday urged the government to offer incentives to real estate developers so that they can boost the supply and demand of cheaper apartments. The industry body said developers are not able to build affordable homes due to high input costs as well as taxes. Meanwhile, the share of affordable homes dropped drastically to 14 per cent of overall sales of residential property.
Speaking to the media, CREDAI President Shekhar Patel demanded that the central government must change the definition of affordable housing by doing away with the cap of Rs 45 lakh per unit.
"We are not able to supply enough affordable housing," Patel said, hoping that the government would heed the industry's demand.
Why Rs 45 Lakh Price Cap Is Irrelevant: 3 Key Factors
Patel pointed factors, including the rise in land prices, rising construction costs, and high taxes at 30-50 per cent of the sale value, are obstacles to enhancing the supply of affordable housing.
Rise in land prices
Rising construction costs
High taxes ranging from 30 to 50 per cent of the sale value, paid to the Centre, state governments, and municipal corporations.
Developers pay anywhere between 30 per cent and 50 per cent of the sale value to the Centre, state governments and Municipal Corporations or development authorities of the respective cities as taxes.
"We are working with the government to overcome these constraints and challenges," Patel said, while hoping that some policy initiatives would be taken in the next six months to boost the supply-demand of affordable homes.
About the industry's demand for change in the definition of affordable housing, he said CREDAI is continuously engaging with the government on this issue.
"We want that the cap of Rs 45 lakh should be removed. There should be only an area limit of 60 sq metre for metros and 90 sq metre for non-metros to be called as affordable homes," Patel said.
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Will a Change in Repo Rate Affect Housing Sales?
The CREDAI president expressed concern that the share of affordable housing in total residential sales has fallen to 14 per cent.
He advised the government to consider imposing lower taxes on affordable housing projects. Patel clarified that even if the repo rate is likely to be increased in the upcoming monetary policy, its impact on sales will not be significant.
Will AI Take Jobs?
When asked about potential job losses due to artificial intelligence (AI), he noted that the industry is adopting the technology to boost operational efficiency. He added that AI is not expected to cause job cuts.
Regarding the demand outlook for the housing market during the upcoming festive season, CREDAI Chairman Boman Irani stated that demand remains robust and anticipates strong sales in the current quarter.
Addressing the Kolkata real estate market, Irani highlighted significant opportunities for both new development and redevelopment in the city.
CREDAI West Bengal President Mohta mentioned that West Bengal faced "policy paralysis" for decades, expressing optimism that conditions will improve under the new BJP-led administration.
The Confederation of Real Estate Developers Associations of India (CREDAI) is hosting its flagship conference, ‘NATCON’, from October 2-4 in Kolkata, with over 1,000 developers attending the three-day event.
(With Inputs From PTI)