Is it true that the demand for affordable housing has been falling in India?

Affordable housing in India is defined as homes priced at up to Rs.45 lakh. For the year 2021, the total share of affordable housing in the total housing market has fallen you from 48% to just about 43%. At the same time, the higher value homes valued at above Rs.75 lakh increased from 25% to 31%. Overall, the sale of homes in the eight prime markets across India has gone up sharply while mofussil town sales have lagged.

Ironically, even the share of housing units costing above Rs.1 crore has increased sharply from 16% to 20% overall. The 8 cities considered for this analysis done by PropTiger includes Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Delhi-NCR, MMR and Pune. The NCR or national capital region includes Gurugram, Noida, Greater Noida, Ghaziabad and Faridabad. The MMR region includes Mumbai, Navi Mumbai and Thane.

In the last few years, the affordable homes had become very popular due to the sharply higher tax deduction offered. For example, under Section 80EEA of the Income Tax Act, first-time homebuyers of property up to Rs.45 lakhs (affordable) get an additional tax deduction of Rs.1.50 lakh. This tax benefit is over and above the existing benefit of Section 24 available to all home loan borrowers.