Developers and home buyers are hopeful that Finance Minister Nirmala Sitharaman in the Interim Budget 2024-25 would announce a slew of measures to boost the realty sector.

They are hopeful that the definition of affordable homes would be changed, tax exemption on home loans would be increased, and higher allocation for PM Awaz Yojana for both rural and urban, which would spur not just the real estate sector growth, but would result in a multiplier effect on other sectors.

The realty sector also expects the government to increase the cap on affordable housing units from Rs 45 lakh to a higher bracket depending on the city size. They also want the carpet area cap for such properties be increased from the current 60 square metre in metro cities and 90 sq m in other cities to higher limits.

The affordable housing segment has been facing a double whammy in the last few years. While sales have taken a hit due to high loan interest rates, developers have also been moving away from the segment due to a surge in the sales of premium properties, high input costs and lower margins in the segment.

The category saw its share in overall sales decline to nearly 20% in 2023 from over 30% in 2022 and nearly 40% in the period before the pandemic. In the top 7 cities too, its share fell to 18% in 2023 from nearly 40% in 2019, according to Anarock Property Consultants.

Sriram Mahadevan, managing director at Joyville Shapoorji Housing, a unit of Shapoorji Pallonji Real Estate, said granting industry status for projects focusing on 50% units under Rs 45 lakh and Rs 75 lakh in Mumbai Metropolitan Region is important.

“Moreover, we urge the government to consider industry body Naredco’s (National Real Estate Development Council) proposal for a Rs 50,000-crore fund and incentives like GST input tax credit and rental housing benefits.”