While demand for sub Rs 50-lakh affordable housing prevails, market players cite increased land rates, escalated construction costs and low margins as key prohibiting factors.
'Unless banks focus on the Rs 10-15 lakh loan segment, growing affordable housing will remain a challenge.'
The US's recent 50 per cent tariff on Indian exports will have a trickledown effect on India's affordable housing, potentially derailing demand as well as supply in this segment, according to experts. Pointing to worker incomes and jobs in micro, small and medium enterprises (MSMEs), and small and medium enterprises (SMEs) that typically make up majority of the customer base of affordable housing, would take a hit in the near terms due to the tariff change, further crippling India's affordable housing sector, already reeling from the impact of the Covid-19 pandemic.
'Developers are into profit-making. And there's not too much money in the affordable segment.' 'So, they don't do affordable housing.'
'Focus will be on smaller loan amounts to meet the needs of affordable homebuyers.'
Mortgage finance remains a structural growth opportunity in India with a policy focus on affordable housing, housing shortages, low mortgage penetration, and rising incomes as drivers. Affordable Housing Finance Companies (AHFCs) serve the mass market, low-income segments, which is the least-serviced category, and to operate in this segment, the mortgage provider needs good assessment skills. AHFCs and HFCs have also been increasing exposure in other mortgage segments (loan against property, developer loans among others).
The new scheme may be announced before the Lok Sabha elections.
The real estate sector wants "high-impact" measures, like special schemes and tax breaks for developers, to revive the fortunes of the affordable housing segment in the country, multiple executives told Business Standard. This segment has been struggling since the Covid-19 outbreak, in contrast to larger and costlier homes which have been selling like hot cakes. The demand comes at a time when the government is taking suggestions from industry players before tabling the General Budget in the Parliament next month.
Affordable homes, priced under Rs 40 lakh per unit, may not be attractive anymore, not just for developers but also for investors, with the segment seeing a 26 per cent price rise over three years since 2022 versus 40 per cent returns from luxury homes priced Rs 1.5 crore and above.
Realtors' apex body CREDAI described the RBI decision to cut repo rate by 50 basis points as a bold step and said this will help boost sales of residential properties.
The affordable housing segment may be seeing an uptick which is a good sign of consumption momentum. This is the biggest-ticket purchase for middle income and lower income families. The current activity is at least partly driven by a pause in interest rate hikes.
Bandhan Bank is expecting that a little less than 50 per cent of its portfolio will be dominated by affordable housing loans in the next three to five years.
The move is to align affordable housing finance flows to the increase in property costs and inflation, says Raghu Mohan.
The new launches in the affordable category could just be another marketing gimmick to push sales and mop up money.
Given that some reputed builders are also present in this segment and the cheap rates, does affordable housing make a good investment option?
Housing sales fell 1 per cent last year to over 3.48 lakh units across eight major cities, with demand stagnating amid an average price rise of up to 19 per cent, according to Knight Frank. In a virtual press conference on Wednesday, real estate consultant Knight Frank India noted that the decline in interest rates on home loans, strong economic growth and lower inflation were some of the key factors that helped in sustaining the housing demand during the 2025 calendar year despite fears of an impending correction.
Budget has proposed an additional deduction of Rs 1.5 lakh for interest paid on loans borrowed up to end-March, 2020 for purchase of an affordable house, valued up to 45 lakh.
Battered and bruised by the slowdown, real estate developers have done a mid-course strategy correction and begun to offer low-cost and affordable houses.
Realty players want single window clearance for all affordable projects, reports Karan Choudhury.
Real-estate firms have welcomed the Goods and Services Tax Council's reforms, expecting better affordability for buyers, spurring demand. The council has reduced the rate on cement from 28 per cent to 18 per cent, while the rate on sand lime bricks or stone inlay work and granite blocks has been cut to 5 per cent from 12 per cent.
Indian government's decision to cut GST rates on various products will increase purchasing power of consumers and boost demand for residential properties in the upcoming festive season, according to realtors' body CREDAI. The association, which has a 13,000 members from across India, said the construction cost is expected to come down because of reduction in GST rates on cement and few other building materials.
Shiv Sena (UBT) and MNS release a joint manifesto for Mumbai civic polls, promising free power, allowances for domestic helps, and property tax waivers.
Tata Housing's efforts at helping less privileged sections of society are commendable, but after a point it won't be able to do much for the simple reason that there aren't going to be enough lenders to give loans to these prospective home buyers.
While gold continues to provide safety after its strong 2025 rally, well-chosen real estate investments held with a long-term view remain attractive.
After bidding adieu to his technology firm, this ex-Citibanker-turned-poet is now indulging in his latest passion of providing affordable housing for the masses.
What will the new Google Pixel 10a look like? This affordable Pixel is due to arrive March 5, featuring a dual-lens camera system on the back, a flat metallic chassis and a centred punch-hole screen.
Reeling under the credit crunch and slump in demand, realty firms and consultants expect the Budget to provide more incentives for affordable housing sector and encourage buyers by doubling exemption limit on interest paid on housing loans to Rs 3 lakh.
The banking sector could see better loan growth in the third quarter of financial year 2026 (Q3FY26) with improved net interest margins (NIMs), though the full impact of latest rate cuts will be largely felt in the fourth quarter. There may be lower slippage in unsecured loans and microfinance institutions (MFIs) along with steady recovery trends, which should lower credit cost.
Home loan demand is moving away from core metropolitan markets, with Tier-2 and Tier-3 cities emerging as the dominant contributors to growth in 2025, a report said.
Affordability can be defined as the consumers ability to purchase, but it is a relative term. It may vary from individual to individual. It may also vary from location to location.
Through the newly created business vertical Happinest, MLDL will launch two such housing projects in Boisar near Mumbai and Avadi in Chennai.
The Maharashtra government on Monday made it mandatory for developers with layout of over 2000 sq mt to reserve 20 per cent of land for affordable housing.
Effects of the new schemes launched under the Pradhan Mantri Awas Yojana would be felt more in tier-II and tier-III cities, as not many budget or affordable housing projects are in the works in metropolitan cities.
The demand for affordable housing is 535,400 units.
/We will stay away from corporate loans,' C S Ghosh, managing director and chief executive officer of Bandhan Bank, tells Namrata Acharya.
After three post-pandemic years of an upcycle, it was a mixed bag for the realty sector in 2025, with sales volumes in the residential real estate moderating across top cities, and commercial real estate and institutional investments emerging as standout performers. Residential: Volumes soften, value holds firm.
New York City Mayor-elect Zohran Mamdani will meet with President Trump at the White House, marking their first meeting since Mamdani's election victory. The meeting highlights Trump's willingness to engage with diverse political figures, even those with differing ideologies.
In the wake of boost from the Budget & RBI move on affordable housing, Tata Housing & Mahindra Lifespace, among others, plan new launches.
'The momentum is driven by rising affluence, strong demand from HNIs (high net worth individuals) and NRIs (non-resident Indians), an increased appetite for larger, well-located homes by branded developers, and support from the economy.'
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