The Confederation of Real Estate Developers' Associations of India (CREDAI), under its new president Shekhar Patel, has raised a strong pitch for a much-needed reform in how affordable housing is defined in India. Patel, who leads Ahmedabad-based Ganesh Housing Corp Ltd, stated that while the current size-based definition for affordable housing is acceptable, the price cap of Rs 45 lakh is outdated and needs to either be lifted or aligned with RBI’s All-India House Price Index (HPI).

The announcement was made during a leadership transition event held on April 18 in Gandhinagar, attended by Gujarat Chief Minister Bhupendra Patel. Boman Irani, Managing Director of Rustomjee Group, passed the baton to Patel and moved into the chairman’s role at the apex real estate body.

Affordable Housing Definition: Size vs. Price

Under existing rules, affordable housing is defined based on unit sizes — 60 square metres in Tier-I cities and 90 square metres in Tier-II and III cities. Homes under this bracket are eligible for 1% concessional GST rates and benefits under the Pradhan Mantri Awas Yojana (PMAY).

However, the price cap of Rs 45 lakh, introduced in 2017, now excludes a vast number of projects from being classified as affordable — even if they meet the size criteria. Patel pointed out that in metros like Mumbai, buyers have to shell out more than Rs 1 crore for a 600 sq ft unit, yet those homes aren’t considered affordable under existing definitions.

He emphasized that “this is not luxury housing” and added that the current cap makes 70% of new projects in Ahmedabad ineligible for affordable housing benefits despite qualifying in terms of size.

Linking Price Cap with RBI’s House Price Index (HPI)

Patel’s solution? Scrap or revise the Rs 45 lakh price cap and instead link affordability to RBI’s HPI, which more accurately reflects the price appreciation in real estate over time. As per the latest HPI data for October-December 2024, housing prices rose 3.1% year-on-year, clearly indicating the inflationary trend in the housing market.

CREDAI’s top brass highlighted that labour, input, and regulatory costs have all gone up, making the Rs 45 lakh threshold impractical. “The same house that cost Rs 45 lakh in 2017 now costs Rs 75-80 lakh,” Patel said, adding that this outdated threshold is now hindering middle-income families from availing the benefits they should be entitled to.

Plans for Real Estate Data Analytics Hub

Apart from lobbying for changes in affordable housing policy, Patel also unveiled plans to launch a dedicated data analytics unit under CREDAI. This unit will pull real-time sales and registration data from state-level Real Estate Regulatory Authorities (RERAs) and state revenue departments, addressing the long-standing gap in reliable data within the sector.

Currently, most market data comes from private property consultancies, which differ in methodology, scope, and sample size, making it difficult for developers and policymakers to base decisions on consistent data.

The proposed hub will ensure better tracking of market trends, consumer demand, and regulatory compliance, enabling evidence-based advocacy for the real estate sector.

Skill Development to Continue

CREDAI’s ongoing efforts to skill construction workers will also continue, according to Patel. He stressed that the industry needs a more professional and skilled workforce to keep up with demand and to ensure timely, high-quality project delivery.

This aligns with India’s national goals for employment generation and infrastructure development and reflects CREDAI’s commitment to not only lobbying but also capacity building.

GIFT City Gets a Boost with Relaxed Prohibition Norms

Patel also discussed the impact of relaxed prohibition rules at Gujarat International Financial Tec-City (GIFT City) on the real estate segment. The city, which is being developed as a global financial hub, has faced challenges in attracting young talent due to lack of lifestyle infrastructure — one of which was the state’s stringent prohibition policy.

Gujarat allowed liquor permits for GIFT City employees and visitors starting December 2023, and recent updates give companies more control over permits. This is expected to boost the area's appeal to young professionals, a majority of whom fall within the 21–35 age group.

“It’s not about drinking every day,” said Patel. “It’s about living without restrictions. Lifestyle flexibility is crucial to attract young talent.”

As a result, developers like Adani Realty, Brigade Enterprises, and Sobha have already started investing in commercial and residential projects within the 16 sq km city. Local developers are also joining the race, making GIFT City one of the hottest upcoming real estate zones.

Conclusion

The Rs 45 lakh price cap for affordable housing is now an obsolete metric that doesn’t reflect the ground realities of India’s real estate sector. With rising costs, urbanisation, and a growing middle class, CREDAI’s demand to revise or index the cap to RBI’s HPI appears both logical and urgent.

Moreover, with data-driven initiatives, skill-building focus, and infrastructure upgrades like those at GIFT City, the real estate sector is looking at a more transparent, professional, and youth-oriented future. CREDAI, under Shekhar Patel’s leadership, is setting the stage for a dynamic shift that could influence policy, pricing, and practice across the country’s real estate landscape.

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