Centre Likely to Revise Affordable Housing Policy in Six Months

08 Oct 2026 CW Team

CREDAI has recommended removing the existing Rs. 4.5 mn price ceiling and replacing it with an area-based criterion. Under the industry body’s proposal, homes measuring up to 60 sq m in metropolitan cities and up to 90 sq m in non-metropolitan cities would qualify as affordable housing, regardless of their sale price.

CREDAI president Shekhar Patel said the organisation was engaging with the government’s Housing Department, Finance Department and NITI Aayog on the proposed policy. He indicated that the government was preparing the framework and that an announcement could be made within the next six months.

The industry body said the current price ceiling had become less relevant as land, construction, financing and regulatory costs increased, particularly in large urban markets. Developers maintain that a fixed price threshold makes it difficult to build homes that meet the affordable housing classification in cities where land prices have risen substantially.

CREDAI also pointed to pressure on the supply of affordable homes, saying the segment’s share of total residential sales had declined to around 14 per cent. It has sought measures to reduce taxation and regulatory costs associated with such projects, arguing that lower costs would improve their viability.

An area-based definition could make the classification more consistent across markets while retaining a focus on smaller homes. However, the final definition, eligibility conditions and incentives will depend on the policy framework approved by the Centre. Any change could affect developers, project economics and homebuyers seeking housing under government-supported affordable housing schemes.

The Centre is preparing a revised affordable housing policy that could be unveiled within six months, according to the Confederation of Real Estate Developers’ Associations of India (CREDAI). The proposed framework is expected to reconsider how affordable homes are defined and classified across metropolitan and non-metropolitan markets. CREDAI has recommended removing the existing Rs. 4.5 mn price ceiling and replacing it with an area-based criterion. Under the industry body’s proposal, homes measuring up to 60 sq m in metropolitan cities and up to 90 sq m in non-metropolitan cities would qualify as affordable housing, regardless of their sale price. CREDAI president Shekhar Patel said the organisation was engaging with the government’s Housing Department, Finance Department and NITI Aayog on the proposed policy. He indicated that the government was preparing the framework and that an announcement could be made within the next six months. The industry body said the current price ceiling had become less relevant as land, construction, financing and regulatory costs increased, particularly in large urban markets. Developers maintain that a fixed price threshold makes it difficult to build homes that meet the affordable housing classification in cities where land prices have risen substantially. CREDAI also pointed to pressure on the supply of affordable homes, saying the segment’s share of total residential sales had declined to around 14 per cent. It has sought measures to reduce taxation and regulatory costs associated with such projects, arguing that lower costs would improve their viability. An area-based definition could make the classification more consistent across markets while retaining a focus on smaller homes. However, the final definition, eligibility conditions and incentives will depend on the policy framework approved by the Centre. Any change could affect developers, project economics and homebuyers seeking housing under government-supported affordable housing schemes.

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