What Constitutes Affordable Housing?
If we made a list of the most-used words in India's real estate lingo at present, the term affordable will certainly top the list. And why not. The government is going all guns blazing to achieve its Housing for all 2022 target. While doing so, affordable housing remains the focus area. Subsequent reports by PropTiger DataLabs show the affordable housing segment has remained the biggest contributor to home sales in the past five years. However, despite all the noise around the term, not many of us are aware what the term actually stands for. According to a universally accepted definition, affordable units are those which could be afforded by a country's population that earns less than that country's average household income. In other words, houses that the low-income households and economically weaker sections (EWS) can afford are termed affordable housing. However, this definition changes according to the context.
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In that case, what does affordable housing mean when we speak of India's real estate?
The Ministry of Housing and Urban Poverty Alleviation defines affordable housing on the basis of size, price, affordable and income.
On the other hand, according to the Reserve Bank of India (RBI) , the cost of affordable residential property should be less than Rs 65 lakh in metro cities and Rs 50 lakh in non-metros. Prior to 2014, the limit was up to Rs 25 lakh for metros and Rs 15 lakh for non-metros. The central bank's definition is based on the loans given by banks to people for building a house and buying flats.
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