The contribution of affordable housing priced up to £45,000 to total home sales in 2021 fell to 43% from 48% a year earlier, while the share of units over £75,000 rose from 25% to 31%, according to property advisor PropTiger.
In a report titled “Real Insight Residential – Annual Round-up 2021,” PropTiger said home sales in eight prime residential markets grew 13% in 2021 to 2,05,936 units from 1,82,639 units last year.
According to the data, 43% of total home sales in India’s top eight housing markets were within the ₹45 lakh price bracket.
The share of units in the 45-75 lakh price bracket rose to 27% in 2021 from 26% last year, while the share of apartments in the 75-lakh to 1 crore range rose to 9%.
The proportion of units costing over £1 crore rose from 16% to 20%. The eight largest cities are Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Delhi-NCR (Gurugram, Noida, Greater Noida, Ghaziabad and Faridabad), MMR (Mumbai, Navi Mumbai and Thane) and Pune.
PropTiger said government policy support is likely to fuel the attractiveness of affordable housing in India in 2021.
Under Section 80 EEA of the Income Tax Act, India offers its first time home buyers an additional tax deduction of 1.50 lakh if the unit is valued up to 45 lakh. Such a borrower can also apply for a subsidy under the government’s Pradhan Mantri Awas Yojana (PMAY) program.
“In addition to government subsidies, record-low home loan interest rates were also a big driver of home sales in the country in 2021, even as the economy slowly recovered later in the year from the shock of the second wave of the pandemic,” he said Dhruv Agarwala, Group CEO, Housing.com, PropTiger.com and Makaan.com.
“We expect more intense activity in the housing market in 2022, especially in the affordable housing segment, as various deadlines for claiming government subsidies are coming to an end,” he added.
Given that the affordable housing segment is vital to the overall growth of the housing sector in India, Mr Agarwala hopes the government will consider extending these deadlines in order to maintain recovery momentum in India’s second-biggest job-creating sector.
“Central government spending of 48,000 crore to expand the supply of affordable housing in both rural and urban areas is a welcome step that will advance the vision of ‘housing for all’,” said Ankita Sood, research director for housing .com, PropTiger.com and Makaan.com.
But Ms Sood said there was also a need to stimulate demand in this segment through tax refunds, stamp duty exemptions and by raising the cap on housing to qualify as affordable housing in major cities to further attract homebuyers.