PMAY’s 3 crore new homes to revive affordable housing, say realtors

Soon after taking charge, the new NDA government approved construction of 3 crore new homes under the flagship Pradhan Mantri Awas Yojana.

The extension of the scheme with a larger target, according to real estate industry stakeholders, has potential to boost the affordable housing market over the next five years.

According to Pradeep Aggarwal, founder and chairman, Signature Global, the new scheme is poised to make a substantial impact on the housing sector, encouraging developers to prioritise affordable housing projects and ultimately boosting the overall housing supply in the country.

“ By expanding carpet area eligibility, the government is addressing critical challenges faced by potential homebuyers in the affordable and mid-housing segments. This progressive step is expected to increase home ownership opportunities for urban and rural populations, ensuring broader access to housing and promoting socio-economic stability," he told BT. 

Rajat Likhyani , Principal Partner at Square Yards says, PMAY has been a crucial initiative in addressing the housing shortage across both urban and rural areas. “The scheme offers essential credit-linked subsidies, helping eligible families to achieve homeownership and access basic amenities significantly improving their living conditions. The Government of India’s recent decision to build an additional 3 crore rural and urban houses is a positive move, further promoting homeownership among economically weaker sections and low-income groups.”

Industry experts such as Prashant Sharma, President of NAREDCO Maharashtra says, the increased focus on rural and urban housing will not only improve the living standards of millions but also create substantial employment opportunities, thereby contributing to the overall economic growth. “This initiative is a significant step towards achieving the vision of 'Housing for All' and will undoubtedly bolster the real estate sector, particularly in the affordable housing segment,” he adds.

Launched in 2016 by the Prime Minister, the flagship scheme has delivered around 2.61 crore affordable homes for the low-income households. However, since the COVID-19 pandemic, affordable housing in India has taken a hit. Share of affordable homes out of the total homes built has fallen steadily since 2019. Data from Anarock shows, while 44% of the total homes build during Q, 2019 were in the affordable category, it fell to 18% by Q1, 2024. 

“The affordable housing sector, a flagship scheme of the government, had not fared well over the last term. The downward spiral of this erstwhile posterchild of the Indian housing industry began during the pandemic, and then morphed into a broader malaise. An affordable housing revival hinges on such government incentives for buyers and developers," says Anuj Puri, Chairman, Anarock Group.