BUDGETING FOR BETTER FUTURE

AFFORDABILITY challenges persist for homebuyers; tweaking tax relief on home loans and capital gains in the Union Budget could significantly improve housing accessibility.

- SHISHIR BAIJAL

Boost Affordable Housing

The share of sales in the <Rs 50 lakh housing units segment has dropped steadily from 48 per cent in 2018 to less than 30 per cent in 2024. Even as overall housing sales go from strength to strength and stand at multi-year highs, affordable housing sales have dropped 16 per cent YoY in 2023 and have seen further degrowth in 2024.

Homebuyers in this segment are most impacted by affordability constraints caused by increasing residential prices and high cost of living.

Under PMAY 2.0, beneficiaries receive a 4 per cent interest rate subsidy on a loan amount of Rs 8 lakh, provided the total loan does not exceed Rs 25 lakh and the house value is up to Rs 35 lakh. However, the high unit prices in major metro cities in India often exceed this limit, making it difficult for homebuyers to benefit from PMAY 2.0.