Union Budget 2024: What Reforms To Expect In The Affordable Housing Segment From Modi 3.0 Team?

India's housing sector is on the cusp of transformative change as the Union Budget 2024-2025 approaches, with the government poised to boost its "Housing for All" initiative by 2025. This move comes at a time of rapid population growth and escalating demand for affordable housing solutions nationwide.

The Indian real estate market, resilient post-pandemic, has embraced digital transformation and enhanced agility. Stakeholders anticipate pivotal reforms and incentives expected in the upcoming budget session, aimed at propelling the sector's growth to new heights.

Ashish Kukreja, Founder & CEO of Homesfy.in & mymagnet.io, emphasizes the critical role of government support in advancing the affordable housing segment. "As the government shifts focus towards affordable housing, incentivizing first-time buyers remains paramount. Extending interest deductions and reducing stamp duties can empower the middle class to achieve homeownership," Kukreja asserted.

Recent market trends reflect shifting dynamics, with India's top seven cities witnessing robust sales of approximately 5.5 lakh units, albeit with a decline in the affordable housing segment. Initiatives like the ambitious Pradhan Mantri Awas Yojana (PMAY), targeting the delivery of three crore homes, with plans for an additional two crore over the next five years.

"India's real estate market can not solely ride on higher-income purchases and needs to encompass the affordable and mid-income housing segment. In 2024, the top seven cities witnessed record sales of approximately ~5.5 lakh units while the affordable housing segment underwent a decline. Initiatives like the three crore Pradhan Mantri Awas Yojana (PMAY) homes with an additional two crore homes planned over the next five years, are a welcome move and affirm the faith of the common man in this government," Kukreja added.

Looking forward, technological advancements are set to reshape the affordable housing landscape, enhancing both inventory management and operational efficiencies by 2025. The forthcoming budget is expected to focus on key areas to stimulate growth:

Enhancing NBFC Liquidity: Proposed measures to bolster liquidity for Non-Banking Financial Companies (NBFCs) aim to alleviate credit constraints faced by developers and prospective homebuyers alike.

Expanding Home Loan Benefits: Increasing the deduction limit on interest for home loans under Section 24 of the Income Tax Act could catalyze demand among first-time buyers, thereby stimulating the affordable housing market.

Boosting Rental Housing: Introducing tax incentives for private rental housing investments could provide viable housing alternatives for migrant workers and young professionals, thus boosting the rental housing market.

The allocation of budgetary resources and policy directives set to be launched have the potential to redefine India's affordable housing sector, fostering inclusivity and sustainability in urban development. As stakeholders await further details, anticipation mounts for a transformative year ahead in India's real estate sector.

With promising strides ahead, the 2024-2025 budget session holds the promise of steering India closer towards its ambitious goal of ensuring affordable housing for all by 2025, reaffirming its focus on socio-economic progress through accessible and sustainable housing solutions. The government's proactive stance towards addressing housing needs aligns with broader efforts to spur economic growth and enhance quality of life across India.

As India prepares to navigate the challenges and opportunities in its affordable housing sector, the upcoming budget session stands as a beacon of hope for millions aspiring to own a home. By leveraging technology, policy reforms, and strategic investments, the government aims to not only meet but exceed the expectations of its citizens.