Though the shortage of affordable homes and high mortgage rates pose obstacles, the government is supporting through affordable housing initiatives and policy changes, making homes more accessible and budget-friendly for first-time owners and lower-income demographics.
Affordable Housing Initiatives by the Government
Pradhan Mantri Awas Yojana ( PMAY)
The real estate market has witnessed a remarkable shift in the affordable housing landscape. The government initiative created substantial opportunities for first-time home buyers and low-income consumers to fulfil their dreams of becoming homeowners. Pradhan Mantri Awas Yojana is one such initiative by the government of India. PMAY was incepted in 2015, and since then, it has sanctioned 65 lakh housing under the affordable housing initiative. Over 35 lakh houses are under construction in 2023, striving to bring homes for all.
The initiative's primary objective 2024 is to complete the construction and hand over the sanctioned houses to the homeowners. This year, the government aims to reach out to a broader section of beneficiaries under the affordable housing initiative. This includes a weaker section of society and low-income groups achieving their dream of owning their homes. The year 2024 is expected to witness new and innovative approaches and technology-driven initiatives in the affordable housing landscape. The new approaches include sustainable options like eco-friendly construction practices, energy-efficient designs, and augment of smart technologies for better living conditions. The current anticipates easier access to finance options and the introduction of new schemes or modifications in existing schemes to make affordable housing more accessible to a broader section of society.
"RERA Act also focuses on quality construction materials and dispute resolution mechanisms; therefore, safeguarding buyers' interests from undue financial burden makes it a vital legislation for the affordable housing landscape."
Real Estate Regulatory Authority Act -RERA
The Real Estate Regulatory Authority Act, or RERA, was passed in 2017 and is considered the most critical legislation, especially in the context of the affordable housing sector. Accentuating transparency, accountability and consumer protection, the RERA Act has played a significant role in making housing more affordable for buyers. By making project registration and disclosure mandatory, RERA helps buyers receive accurate information and protects them from the risk of hidden costs or project delays that could inflate prices.
RERA Act also focuses on quality construction materials and dispute resolution mechanisms; therefore, safeguarding buyers' interests from undue financial burden makes it a vital legislation for the affordable housing landscape. RERA Act overarch to on-time delivery of the project and commits to adherence to specified standards protects the buyer's interest.
"Affordable housing initiatives in a country's budget play a vital role in addressing the housing needs of low-income individuals and families, ultimately improving their quality of life and well-being."
Lowered GST in PMAY Projects
The total tax component, including stamp duty and registration fee, constituted twenty percent of the property's total value. In 2018, the GST council addressed this issue by reducing the rate to 8% of the total value of an under-construction property under PMAY. This was a welcome reprieve for homeowners in the affordable housing sector.
Benefits of Budget Allocation in Affordable Housing Initiatives
In a country's budget, affordable housing initiatives receive funding to support programs such as public housing developments, rental assistance programs, and first-time homebuyer assistance programs. This funding is essential for constructing and maintaining affordable housing units and providing financial assistance to low-income individuals and families who struggle to afford housing in the private market.
Additionally, affordable housing initiatives in a country's budget include incentives for private developers to build affordable housing units and tax credits for investors who support affordable housing projects. This aligns with the government's goal to increase the availability of affordable housing options and help low-income individuals and families access safe, decent, affordable housing.
Overall, affordable housing initiatives in a country's budget play a vital role in addressing the housing needs of low-income individuals and families, ultimately improving their quality of life and well-being. By prioritizing these initiatives in the budget, the government demonstrates its commitment to providing accessible and affordable housing for all. In recent times, the government has laid out many affordable housing initiatives like Pradhan Mantri Awas Yojana and the RERA Act to support and develop affordable housing. This budget is expected to modify or introduce new schemes in the affordable housing segment. A more significant allocation of funds is expected in this interim budget, and more buyer-friendly schemes and reduction of taxes are anticipated.