Affordable homes front runner in driving residential sales

Thanks to interest subsidy under CLSS of Pradhan Mantri Awas Yojana and lower GST rates, affordable homes continue to dominant residential sales. Over half of the residential units sold between the second quarter of 2017-18 financial year and the fourth quarter of FY19 were in the affordable price bracket of less than Rs 50 lakh.

A recent study across 8 tier-1 cities point to a healthy absorption trend of affordable units across India, with 54% of sales driven by units below 50 lakh. Across tier 1 cities , the percentage share of sales of ready properties has risen from 11 percent in 2014 to 27 percent in 2018. This is largely because of the zero risk of development and zero percent GST on completed homes.

Says Pradeep Aggarwal, Chairman, Assocham National Council on Real Estate, housing and urban development and Founder & Chairman, Signature Global, ” The home truth is that after the implementation of RERA , interest subsidy of up to 2.67 lakh under PMAY for first time buyers of affordable homes and reduction of GST on under construction homes to 1% , end-users have been making home purchases. Moreover, the availability of ready inventory has been further fueling the interest of home buyers”.

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