Theme: Real Estate | Indian affordable housing experiences a 25% drop due to high costs and policy gaps

In this episode of the State of the Economy podcast businessline’s Abhishek law is joined by Niranjan Hiranandani, Chairman, NAREDCO, to discuss key challenges in the Indian real estate sector, particularly around affordable housing.   Hiranandani shares his insights on the current state of affordable housing, which has experienced an unexpected 25% drop in numbers, something he has never seen in his 40+ years of experience. This decline is seen not only in major cities but across the country, creating a shock for both developers and the government.  The discussion delves into the reasons behind the slump, with Hiranandani highlighting factors like the exhaustion of the PMAY (Pradhan Mantri Awas Yojana) interest subsidy scheme and the persistence of high RBI interest rates. He suggests that the government needs to expedite the new affordable housing policy and reduce interest rates to stimulate demand.   The conversation also touches upon the gap in the market for large-scale affordable housing projects, especially from major developers. High land prices and taxes, such as stamp duties and development charges, are making it difficult to build affordable homes, with 50% of a home’s cost in Mumbai going towards taxes.   Hiranandani draws attention to the global norm of rental housing, pointing out that in developed countries like the United States, 50% of the population lives in rented homes. He urges the government to introduce policies that incentivise the development of rental housing, just as they have for commercial properties, to accommodate the growing demand for flexible living spaces.    (Host: Abhishek law Producer: Amitha Rajkumar) About the State of the Economy podcast  India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders.