The Indian government is considering increasing tax rebates on home loans in the interim budget, in an effort to stimulate the housing market, particularly in the budget homes segment. The government is being urged to raise the tax rebate on home loan interest rates from INR 2 lakh to at least INR 5 lakh. The affordable housing segment has seen a decline in demand since the pandemic, and industry experts believe that increasing tax rebates could help sustain the current strength in demand. Additionally, experts suggest modifying the qualifying standards for affordable housing to make more buyers eligible for additional deductions, as the current definition of affordable housing makes it unaffordable for many potential buyers. The government is also being urged to release sovereign land for affordable housing in order to meet the target of providing housing for all.
Residential real estate sales in India saw a 33% year-on-year growth in 2023, with a total of 4.10 lakh units sold. The report suggests India registered double-digit growth in both demand and new supply in the same period, with new supply at an all-time high. Stable interest rates are expected to boost home purchases and instill confidence in developers in 2024.
