According to the UnivDatos, rapid urbanization, growing government initiatives, and low interest rates on housing will drive the scenario of the Indian residential real estate market. As per their “India Residential Real Estate Market” report, the market was valued at ~USD 42.5 billion in 2023, growing at a CAGR of about 24.1% during the forecast period from 2024-2032 to reach USD billion by 2032.

The future policies of the government of India occupy a very special place while considering the recent development of the Indian residential real estate sector. These interventions are aimed at improving the labor market, availability of decent and affordable housing, improving infrastructure, and facilitating investment. Here are some key schemes:

1.     Pradhan Mantri Awas Yojana (PMAY):

PMAY was started in 2015 to provide affordable shelter to urban poor by 2022. Under the scheme, the grant is payable in respect of the acquisition of a primary home or the building of a home. It includes two components:

·       PMAY (Urban): Concentrates on urban society and gives interest rate subsidies for first-time home buyers on home loans.

·       PMAY (Gramin): Emphasizes need-based rural housing, to make every rural family owner of a pucca house.

This is one of the best government interventions that have called for affordable houses or buildings and most importantly it has boosted construction initiatives across the country.

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2.     Credit-Linked Subsidy Scheme (CLSS):

CLSS for PMAY is again divided into interest subsidy slabs of up to 2.67% for different categories of Economically Weaker Sections (EWS), Lower Income Groups (LIG), and Middle Income Groups (MIG). This makes home financing cheaper thus enhancing home ownership among the low and middle-income earning groups.

3.     Real Estate (Regulation and Development) Act 2016 (RERA)

The idea behind the formation of RERA is to safeguard the interests of homebuyers as well as to bring more accountability in the functioning of the real estate sector. It requires that real estate projects and practitioners must be registered to avoid cases where the developers take a lot of time delivering substandard projects. This regulation has provided the buyers with confidence hence stimulating investment in the residential sector.

4.     Goods and Services Tax (GST):

With the introduction of GST, the taxation structure in the real estate sector has become more streamlined. The quantity of tax imposed on home purchasers has gone up slightly, however; overall, an unlimited number of indirect taxes have eased up costs for developers to kick off new projects. Due to this clarity in taxation, there has been the development of a more organized market.

5.     Infrastructure Development Initiatives:

Among these, the government’s infrastructure creation Initiatives such as the Smart Cities Mission and Atal Mission for Rejuvenation and Urban Transformation (AMRUT) have improved the residents’ quality of life in urban India. This makes the infrastructure need to be developed and enhanced to attract more people into the larger areas hence the increase in demand for residential property. Such measures include the promotion of transport channels; establishment of common facilities such as water systems, and construction of latrine facilities.

6.     Affordable Housing in Partnership (AHP):

This scheme helps private developers to come forward in affordable housing projects by providing subsidies and incentives. In retrospect, the AHP framework is geared towards increasing the stock of accommodation that is affordable in urban centers via public-private partnerships.

7.     State-Specific Housing Schemes:

Several state governments have also developed their housing plans to supplement the country’s plans. For instance, the Maharashtra Housing and Area Development Authority (MHADA), Maharashtra, aims to offer affordable price housing to people and similarly, the Delhi Development Authority (DDA) strives to make their housing scheme affordable for the people.

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Recent developments in the market:

·       In September 2024, the Goa government announced to introduce low-cost housing scheme in every taluka in the coming two years.

·       In July 2024, the Haryana Cabinet approved the 'Mukhya Mantri Shehri Awas Yojana' on Friday, aiming to provide affordable housing to the economically weaker sections (EWS) of society. The decision was made during a state Cabinet meeting chaired by Chief Minister Nayab Singh Saini. offer housing facilities to poor families residing in urban areas who either do not possess their own house or currently live in 'kutcha houses'.

·       In June 2024, the Union Cabinet announced its first major policy decision to assist in the construction of an additional three crore rural and urban houses under the Pradhan Mantri Awas Yojana (PMAY), aimed at ensuring continuity to the Housing for All scheme and will help revive the affordable housing segment.

Conclusion

Overall, these government schemes and initiatives have significantly contributed to the growth of the residential real estate market in India by making housing more accessible, boosting investor confidence, and encouraging infrastructure development. As these efforts continue to evolve, they are likely to further enhance the residential real estate landscape, fostering sustainable growth and addressing the housing needs of the population.

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