The Confederation of Real Estate Developers’ Associations of India (CREDAI) has recommended measures aim to ease structural issues in affordability, finance access, taxation, and regulation, while supporting job creation and urban growth through real estate’s linkages with materials, manufacturing, logistics, and finance.
According to the developers’ body with 13,000 members, these recommendations align with government priorities, including Housing for All, urban rejuvenation, and improving ease of living.
“Housing remains a critical engine of economic growth, employment generation, and urban transformation. To keep pace with India’s rapid urbanisation, it is vital to strengthen affordability, expand access to formal finance, and develop a robust rental housing ecosystem,” said Shekhar Patel, President, CREDAI.
Affordable housing norms, unchanged since 2017, cap unit size at 646 sq ft (60 sq m) in metros and 969 sq ft (90 sq m) elsewhere, with a Rs 45 lakh price limit that no longer reflects current costs and multiple definitions across schemes add confusion.
Developers have recommended raising the cap to 969 sq ft in metros and 1,292 sq ft in non-metros, removing the price threshold, and adopting a single definition to simplify compliance and expand supply.
Overall residential sales across seven major cities fell 11% in 2025, driven largely by a 30% decline in the affordable housing segment for homes priced below Rs 1 crore, while the premium segment showed steady growth.The Rs 2 lakh home-loan interest deduction cap, according to experts, is outdated as many urban buyers now pay Rs 4-6 lakh annually in interest. CREDAI has suggested removing the cap for the first self-occupied home and extending it to the new tax regime, with safeguards to prevent misuse, to improve affordability and stimulate demand.
Low-income and informal workers often lack documentation, limiting access to formal home loans and pushing them to high-cost lenders. Developers have proposed a credit guarantee scheme for affordable housing and home-improvement loans (up to 80-90% of property value) to de-risk lenders and expand credit to low-income group borrowers, funded through a small guarantee fee with no upfront fiscal cost.
According to Patel, targeted measures including redefining housing norms, enhancing interest deductions, introducing a credit guarantee, rationalising GST, and launching a National Rental Housing Mission, can unlock investment, boost buyer confidence, and widen financial inclusion. They can also sustain housing supply, support affordable urban rentals, improve living conditions, and aid gradual slum reduction.
High Goods & Services Tax (GST) rates and complex input taxation have raised project costs and constrained urban supply. CREDAI has called for lower GST on residential units and works contracts, with streamlined input tax credits, to cut costs, improve project viability, increase transactions, and expand sector revenue.
The body has also proposed a National Rental Housing Mission to expand affordable rentals in tier-1 and tier-2 cities, formalise the market, curb informal settlements, support mobility, and create a sustainable investment class with minimal budget impact.
