The Indian government is actively working on a revised affordable housing policy, with a new framework anticipated within the next six months. This initiative aims to address existing constraints in the crucial housing segment.
CREDAI Advocates for Policy Reform
The Confederation of Real Estate Developers’ Associations of India (CREDAI) has been in discussions with key government departments, including the Housing Department, Finance Department, and NITI Aayog, regarding the proposed policy changes. A central demand from the developers' body is the elimination of the current ₹45 lakh price cap used to define affordable homes.
CREDAI President Shekhar Patel stated, "We want that the cap of ₹45 lakh should be removed. There should be only an area limit of 60 square meters for metros and 90 square meters for non-metros to be called affordable homes." This proposed change would shift the definition from a price ceiling to a size-based criterion.
Addressing Market Realities and Supply Constraints
Developers argue that the ₹45 lakh price ceiling has become outdated and restrictive, especially with the continuous rise in property prices and development costs across major Indian cities. CREDAI highlights that factors like limited land availability, various taxes, and complex approval processes further exacerbate the challenge of supplying affordable housing units.
According to Patel, organized developers are currently struggling to meet the significant demand for affordable housing from homebuyers. The share of affordable homes in overall residential property sales has also reportedly declined, underscoring the pressing need for policy adjustments to stimulate supply and make housing more accessible.
Broader Real Estate Sector Growth
These policy discussions occur against a backdrop of substantial growth in India's real estate sector. A recent report by CREDAI and property consultant Anarock indicated that the total value of housing projects under construction surged to an estimated $430 billion in 2025, a significant increase from $235 billion in 2019 and $45 billion in 2009. Residential real estate accounted for a dominant 85% of this value in 2025, reflecting robust housing demand nationwide.
The broader real estate market has expanded from approximately $120 billion in 2017 to about $600 billion currently, with projections to reach $1 trillion by 2030 and nearly $5.8 trillion by 2047, underscoring the sector's critical role in the Indian economy.