Centre likely to revise affordable housing policy in six months, says CREDAI

According to fresh market updates, The Centre is preparing a new affordable housing policy and is likely to introduce a revised framework within the next six months, according to the Confederation of Real Estate Developers’ Associations of India (CREDAI).

“We are in touch with the government Housing Department, Finance Department, and NITI Aayog. The government is preparing the new affordable housing policy and hopefully that will be unveiled in next six months,” CREDAI President Shekhar Patel stated at CREDAI NATCON 2026 in Kolkata.

The real estate industry is pushing for a fundamental change in the way affordable housing is defined, with CREDAI recommending that the existing Rs 45 lakh price ceiling be removed and replaced with an area-based criterion.

“We want that the cap of Rs 45 lakh should be removed. There should be only area limit of 60 sq metre for metros and 90 sq metre for non-metros to be called as affordable homes,” Patel stated.

Under CREDAI’s proposal, homes measuring up to 60 sq m in metropolitan cities and 90 sq m in non-metropolitan cities would qualify as affordable housing, irrespective of their sale price.

The industry body argues that the existing price ceiling has become increasingly out of sync with housing development costs, particularly in large urban markets where land and construction costs have risen sharply since the Rs 45 lakh threshold was introduced.

Affordable housing supply under pressure

The proposed policy comes against a backdrop of declining affordable housing supply. CREDAI has stated the segment’s share of overall residential sales has fallen to around 14 per cent as developers face rising land, construction, financing and regulatory costs.

Developers argue that retaining a set price cap makes it difficult to develop homes that qualify as affordable housing in cities where land prices have risen substantially. An area-based definition, they say, could make the classification more relevant across different markets while continuing to focus on smaller dwelling units.

CREDAI is additionally seeking measures to reduce the overall cost burden on affordable housing projects, including taxation and regulatory costs, to make such projects more viable for developers.

The proposed overhaul could have implications for both developers and homebuyers if the government accepts the industry’s recommendations. That stated, the final definition, eligibility criteria and incentives will depend on the framework ultimately approved by the Centre.