New Delhi [India], January 22 (ANI): The Indian housing finance sector is witnessing a significant shift toward premium developments, but for the industry to remain sustainable and inclusive, a renewed focus on affordable housing is essential.
Mehernosh Tata, CEO of Godrej Housing Finance, highlighted in a recent ANI interview that while the real estate market in top cities is currently favoring luxury homes priced above Rs 1 crore, there is an urgent need to cater to the mid-income segment.
He emphasised that the definition of "affordable housing" requires an immediate update to reflect current market realities, suggesting that "the definition should be closer towards one crore so that it encourages the real estate developers to build these homes for the common man, for the salaried man who's working in these metros." Currently, the threshold stands at Rs 45 lakhs, a figure Tata believes should be raised to Rs 75 lakhs for non-metros and up to Rs 1 crore for major metropolitan hubs.
Addressing the long-term vision for urban migration, Tata noted that with nearly 40 per cent of India's population expected to reside in urban areas by 2030, the government's focus on infrastructure and the Pradhan Mantri Awas Yojana (PMAY) 2.0 is timely. He pointed out that inflation is becoming more range-bound and that the rationalisation of GST on construction materials has sent a positive signal to the industry.
To further bridge the supply-demand gap, he proposed a collaborative model between the state and private sectors, suggesting that "public-private partnerships, especially where public sector institutions have land and private developers could come in and develop these affordable homes," would create a "win-win-win" scenario for the government, developers, and the "aam aadmi".
To directly assist the salaried class and first-time buyers, Tata outlined specific recommendations for the Union Budget. A primary request is the upward revision of the interest deduction limit on home loans under the Income Tax Act. He suggested that the current Rs 2 lakh cap be increased to Rs 5 lakhs, noting that "it will save the mid-income salaried earners anywhere between four to eight thousand rupees on his monthly saving, which is a big thing for these salaried folks." Such a move would significantly ease the financial burden on families looking to secure their own shelter while simultaneously stimulating demand in the housing sector.
Beyond tax concessions, the Godrej Housing Finance chief advocated for innovative financial solutions to help those struggling with the initial costs of homeownership. He highlighted that many first-time buyers, particularly women, find it difficult to cover registration and stamp duty.
Tata urged the central and state governments to work together to fund these initial contributions through long-term, repayable models rather than subsidies. Additionally, he suggested that the government provide developers of budget homes with access to cheaper capital or tax concessions, ensuring that the benefit of lower costs is ultimately passed on to the end consumer, helping every Indian family realise the dream of owning a home. (ANI)