Union Budget 2025: Affordable housing expectations in MMR, pan India

The affordable housing segment once the star performer of Indias real estate market has seen a significant decline in recent years with the Mumbai Metropolitan Region MMR being one of the few remaining pockets of activity The upcoming Union Budget 2025 could turn the tides for the housing sectorOnce driven by the Union Governmentrsquos lsquoHousing for Allrsquo program and supported by lower GST rates and tax breaks the segment accounted for nearly 40 per cent of total housing supply in 2018 and 2019 However today affordable housing is struggling for survival and the upcoming Union Budget 2025 holds huge importance for its revivalAffordable housing in MMRWhile cities like Bangalore Hyderabad and Chennai have witnessed an almost complete erosion of affordable housing supply MMR stands out as one of the few regions still offering substantial options in this segment As of January 2025 nearly 31 per cent of MMRrsquos upcoming residential supply is priced under Rs 40 lakh providing hope for firsttime homebuyers as per ANAROCKMMRrsquos resilience in this segment stems from its vast and varied housing landscape including peripheral areas like Thane Navi Mumbai KalyanDombivli and MiraBhayandar The MMR continues to attract developers and buyers due to relatively lower land costs infrastructure growth and connectivity improvements However even here rising input costs and dwindling profit margins are pushing developers towards highend and luxury projectsPandemic fallout and shifting demandThe COVID19 pandemic profoundly changed housing preferences In any case as the nation awaits the Union Budget 2025 of the Modi governmentrsquos third term there is no doubt that the stakes for the languishing affordable housing sector are very high In fact it is hoped that Union Budget 2025 will be a resuscitating turning point for it stated ANAROCKThe demand for larger multifunctional homes with lifestyle amenities soared as remote work and online schooling became the norm For many Indians the concept of starting with small homes and upgrading later lost its appeal In MMR too buyers increasingly sought bigger units reducing the demand for smaller budgetfriendly homes This shift is reflected in MMRrsquos affordable housing supply share which fell sharply from its peak in 201819 The pandemic also forced the segmentrsquos target audience consisting of bluecollar workers lowerpaid workforces and those just starting out on their careers to be severely cashstrapped and obviously buying homes did not feature among their immediate priorities stated ANAROCK Instead the rental market picked up after the pandemic abated and businesses sent out their return to office callShrinking supplyIn 2024 and as of January 2025 the only cities with any sizable activity in this segment are Kolkata and MMR In both these cities nearly 31 per cent of the total upcoming supply is priced below Rs 40 lakh as per research by ANAROCK Bangalore at the same time is devoid of any supply in this segment Hyderabad and Chennai are seeing only a minimal 2 per cent supply sharePicANAROCKNCR has witnessed a drastic reduction in its share of affordable housing falling from 62 per cent in 2020 to only 11 per cent in 2024 In terms of both demand and supply NCR is showing far greater interest in highend and luxury properties which is evident from the rise in the value of inventory sold during the year Residential apartments sold in the NCR primary market in 2024 are estimated to be valued at Rs 90000 cr which is 32 per cent more than 2023 In value terms NCR is second only to MMR ANAROCK statedPMAY and MMRrsquos affordable housing prospectsThe Pradhan Mantri Awaas Yojana PMAY remains a key driver of affordable housing in MMR with significant progress since its launch in 2015 According to data by the Ministry of Housing and Urban Affairs nearly 11864 lakh homes have been sanctioned nationwide as of January 20 this year and over 9022 lakh units have been completed and nearly 11250 lakh have been groundedIn terms of the financials nearly Rs 200000 cr of central assistance has already been committed ANAROCK stated However the scheme faces challenges such as the lack of digitised property records which hinders access to interest subsidies and other benefitsTo revitalize affordable housing in MMR the government must address these bottlenecks Introducing new lowcost sustainable construction technologies and improving awareness of PMAY benefits can significantly boost the segmentAny announcements that Union Budget 2025 will make in context with affordable housing will doubtlessly involve PMAY said ANAROCKWhat to expect from the Union Budget 2025The Union Budget 2025 is anticipated to play a pivotal role in reviving the affordable housing market Any substantial announcement for the affordable housing segment in the upcoming Union Budget 2025 can strengthen the trend and give affordable housing a seriously needed legup ANAROCK statedMMR continues to hold promise as a critical hub for affordable housing but its future depends on policy interventions and market dynamics in the months to comeEven if such measures dont initiate a fullblown revival they can at least improve this segments overall prospects Finally a healthy housing market caters to a broad range of buyers and doesnt favour just one segment