Affordable housing giving push to real estate sales.
Affordable housing is the only silver lining for the battered real estate sector right now. One in every two houses sold in the December quarter was under the Rs 50 lakh bracket as government sops and lower price tags gave a push to sales.
While 32 per cent of total sales were in the affordable category in December FY16 quarter, the number has crossed the halfway mark now. Alongside, sales in the Rs 1 crore to 2 crore category has more than halved from 29 per cent to 12 per cent in the third fiscal quarter.
Under the PM Awas Yojna (PMAY), households with an annual income of up to Rs 18 lakh can avail Rs 2.3 lakh upfront subsidy for a home. Buyers are also eligible for income tax exemption on housing loans.
Developers, under Section 80-IAB, also get 100 per cent deduction on profits generated from an affordable housing project for flats up to 30 sq metres in four metros cities and 60 sq mt in other cities. This also boosted supply in the segment. In tune with the demand, 51 percent of the new launches in the December quarter were in the cost bracket of under Rs 50 lakh.