Signs are afoot for a much-needed recovery in Indian real estate. Housing sales volumes have gone up by approximately 13% for FY18 in the top 8 Indian cities according to several studies. This growth has been driven majorly by affordable housing and the mid-income property segment. This comes after 5% growth in sales was posted by the real estate sector in 2017. MMR (Mumbai Metropolitan Region) posted the highest growth of 25% out of all these markets as per reports. Delhi-NCR came in at second place with 19% growth in sales.
Hyderabad saw 17% of growth in real estate sales. However, sales volumes went down by 15% and 5% for Chennai and Bangalore respectively. Affordable housing contributed a whopping 18% to overall sales figures for tier-I cities such as Delhi-NCR, Mumbai, Pune, Bangalore, Chennai, Hyderabad, Ahmedabad and Kolkata. New launches are spurring sales volumes across all realty segments in these cities. There are multiple finance schemes which are acting as growth factors along with competitive property pricing and modified housing configurations.
A major factor has been the lower rates of interest on home loans along with Government incentives for affordable housing. The Government has now given infrastructure status to affordable housing and there is a lower GST rate for this sector. The loan tenor under the CLSS (Credit Linked Subsidy Scheme) of the PMAY (Pradhan Mantri Awas Yojana) has also been increased with income tax benefits for apartments with carpet areas of 645 sq. ft. Several real estate developers have confirmed that the majority of sales volumes has come from apartments priced lower than Rs. 50 lakh. This makes it very clear that the market is being driven primarily by affordable and mid-income housing. Compact apartments and lower price points are boosting demand in the Indian real estate sector according to experts.