The Confederation of Real Estate Developers’ Associations of India (CREDAI) has formally urged the central government to raise the price cap for affordable housing to Rs 90 lakh, doubling the current threshold of Rs 45 lakh. This request, timed ahead of the upcoming Union Budget, aims to reflect inflation, rising construction costs, and evolving market dynamics, officials said.
CREDAI President Shekhar Patel highlighted that the existing definition of affordable housing, which limits residential units to Rs 45 lakh and 60–90 square metres in metropolitan and non-metropolitan areas respectively, has remained unchanged for the past eight years. “Affordable housing today faces cost pressures not envisioned when these thresholds were last set. Adjusting the cap is critical to sustaining the sector and ensuring continued delivery of quality homes for middle-income families,” an industry representative said. The current metropolitan city classification covers Bengaluru, Chennai, Delhi NCR (restricted to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata, and Mumbai, including the entire Mumbai Metropolitan Region. CREDAI has emphasised that maintaining outdated caps risks limiting developer participation and slowing project rollout in key urban and peri-urban areas.
Policy support, including tax incentives, remains vital to sustaining affordable housing supply. The government currently offers reduced Goods and Services Tax (GST) rates for the sector, with recent revisions lowering GST on affordable housing from 8% to 1% and on housing construction materials such as cement, marble, granite, and sand to 5–18%. According to industry analysts, these measures could reduce construction costs by 5–7%, a factor CREDAI hopes will complement the proposed price cap revision. At a national real estate conclave, Union Home Minister also urged developers to integrate low-cost housing within broader urban projects, signalling policy alignment with CREDAI’s recommendation. Experts note that raising the price cap could make large-scale projects financially viable while continuing to prioritise inclusivity, resource efficiency, and sustainable urban design, aligning with national commitments to net-zero urban growth.
CREDAI’s appeal reflects wider pressures on the real estate sector, including escalating material costs, regulatory compliance, and the need to provide high-quality homes without compromising urban sustainability. If accepted, the proposed cap revision could enable developers to plan projects that integrate green building principles, efficient resource management, and community-oriented design, thereby fostering inclusive, resilient, and equitable housing solutions across India’s metropolitan corridors. As policymakers consider the upcoming budget, industry stakeholders emphasise that supportive frameworks for affordable housing are essential to meet housing demand, catalyse investment, and ensure urban growth remains sustainable and inclusive.
CREDAI Seeks Increase In Affordable Housing Price Cap To Rs 90 Lakh