Only a small number of housing projects built by various developers meet the government’s criteria for affordable housing incentives in 2019, according to a report. ANAROCK Property Consultants, in a report, revealed that of the total housing supply of 1,39,490 units in the top 7 cities in the first half of 2019, merely 39,840 units meet these criteria.
The government’s recent Budget bonanza of an additional Rs 1.5 lakh tax deduction on interest repayment of home loans availed till March 2020 will benefit very few people in urban India, it said. To avail credit subsidy benefits and the new Budget sops for affordable housing, a home must be priced Rs 45 lakh and not exceed 60 sq. mt carpet area or approximately 850 sq. ft built-up area, including overall loading. Of the 1,39,490 units launched in the first half of 2019 in the top 7 cities, merely 29 percent of units qualify under the government-stipulated affordable category, the report said.
Of the housing shortage of 19 million units in urban India, nearly 96 percent pertains to the economically weaker sections (EWS) and low income group (LIG) categories – the target of the government’s affordable housing push. According to the report, nearly 2.40 lakh units that are unsold across the top 7 cities as of second quarter of 2019 are in the affordable category but many of these do not comply with the government’s “affordable” definition. These unsold stocks have increased by nearly 3 percent against the corresponding period in 2018.
Mumbai Metropolitan Region (MMR) topped the list with the maximum launches of 17,700 units in this category. Pune came distant second with 9,350 units. The urban housing shortage in Maharashtra is pegged at 19.7 lakh homes.
National capital region (NCR) saw the launch of 6,950 units in this category in the first half of 2019, while Bengaluru, Chennai, Hyderabad and Kolkata together accounted for a mere 15 percent share at approximately 5,820 new units in this category, it said.
High input costs in urban areas, land prices in the municipal limits of the major cities (where urban affordable housing is most needed) make them unfeasible for developers to launch affordable housing projects, the report stated.