CREDAI says unable to build affordable homes due to high input cost, taxes; seeks govt sops

Kolkata: Realtors apex industry body CREDAI on Friday said developers are not able to build affordable homes due to high input costs as well as taxes and urged the government to provide incentives to boost supply-demand of cheaper apartments.

Addressing a press conference here, CREDAI President Shekhar Patel also demanded that the central government change the definition of affordable housing by doing away with the cap of Rs 45 lakh per units.

He hoped that the government would heed to the industry's demand.


"We are not able to supply enough affordable housing," Patel said.

Land price, rising construction costs, and high taxes at 30-50 per cent of the sale value are major constraints for enhancing the supply of affordable housing, he pointed out.

The developers pay anywhere between 30 per cent and 50 per cent of the sale value as taxes to the Centre, state governments and municipal corporations.

"We are working with the government to overcome these constraints and challenges," Patel said, while hoping that some policy initiatives would be taken in the next six months to boost supply-demand of affordable homes.

About the industry's demand for change in definition of affordable housing, he said the CREDAI is continuously engaging with the government on this issue.

"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 said.

The CREDAI President rued that the share of affordable homes in the overall sales of residential properties has dropped to 14 per cent.

He suggested that the government consider charging lower tax for affordable housing projects.

Patel ruled out that there would be much impact on sales from possible increase in repo rate by repo rate in the upcoming monetary policy.

Asked about threat of job losses because of artificial intelligence (AI), he said the industry is embracing this technology as it is proving to be helpful in improving operational efficiencies. He said there would not be job losses because of AI.

On demand outlook for housing market in the upcoming festive season, CREDAI Chairman Boman Irani noted that the demand continues to be strong and expects good sales in the current quarter.

Asked about the Kolkata property market, Irani said there is a huge potential for development and redevelopment in this city.

CREDAI West Bengal President Mohta said there was a "policy paralysis" for several decades in the West Bengal and hoped that things would improve under the new BJP-ruled government.

The Confederation of Real Estate Developers Associations of India (CREDAI) is organising its flagship conference 'NATCON' during October 2-4 in Kolkata. More than 1000 builders are participating in this three day event.