Is the Government bridging the housing paradox?


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housing regulator

Real estate industry lauds the hike in saleable carpet area for the MIG-I and MIG-II category flats under PMAY. Not only will this spoil the buyers for choices, but also help developers offload unsold inventory.

The Indian housing paradox was highlighted with reports suggesting a shortfall of 20 million households alongside a parallel estimate of accruing unsold inventory across cities. Two years after consistent efforts towards making the ‘Housing for All’ mission a success, reports indicate the housing deficit to have shrunken to 10 million households, while the unsold stock continues to exist across budget segments. Expanding supply amid passive demand seemed to widen the paradoxical situation in the Indian real estate. However, the government soon came to the sector’s rescue and opened avenues for disposing the piling inventory with developers. In the latest move, the government hiked the saleable carpet area under the affordable housing scheme – Pradhan Mantri Awas Yojana (PMAY).



Old Saleable Carpet Area

Revised Saleable Carpet Area

MIG category with income Rs 6-12 lakh/annum

90 sq m (968 sq ft)

120 sq m (1184 sq ft)

MIG category with income Rs 12-18 lakh/annum

110 sq m (1290 sq ft)

150 sq m (1614 sq ft)


The step, which is hailed by all stakeholders of the real estate industry, is expected to aid developers in offloading the large volume of ready inventory lying unsold with them. Middle-income homebuyers can now access bigger homes at subsidised interest rates on home loans. Overall, the decision could trigger a renewed interest in the realty market, which has remained muted for long on account on multiple policy reforms such as RERA and GST.

Appreciating the government’s decision to hike the saleable carpet area under PMAY, Gagan Banga, VC & MD, Indiabulls Housing Finance Ltd, says, “The cabinet’s decision is a massive positive for the macros of housing. Homebuyers now have a larger pool of prospective houses to choose from. The fence sitters will now be given a further push to finalise deals. Builders, in the meanwhile, will not only enjoy the general uptick in the market in the forthcoming quarters, but can also accelerate the sale of housing units which were earlier missing out on a sizeable portion of the Middle Income Group (MIG) audience. The Government remains committed to its headline mission of ‘Housing for All by 2022’, and has yet again delivered a further impetus for homebuyers, home suppliers and home financiers by easing the ecosystem.”

The affordable housing segment received a shot in the arm in Union Budget 2017-18 with the government granting it infrastructure status aiding easy funding and construction of low-cost homes. This latest step is another push from the government to aid fast absorption of the available ready units – benefitting both buyers and developers.

Here’s what a few other industry experts have to say regarding this instrumental move –

Jaxay Shah, President, CREDAI National

“Housing for All by 2022 has taken a huge leap forward by the increase in unit size of MIG Houses under Credit Linked Subsidy Scheme. The average middle class in smaller towns and cities would now be able to afford bigger and better quality homes than before. On the supply side, private developers have improved incentives to increase scale and contribute towards bringing about a New India.

Rajeev Talwar, Chairman and Niranjan Hiranandani, President, NAREDCO

The move will help in meeting the aspiration of millions of MIG homebuyers and aid in clearing unsold stock. This will also encourage developers to launch new projects and boost economy, GDP growth and employment. This decision will now bring the entire demand for affordable housing under the interest Subvention Scheme, accounting for almost 96 percent of the total demand for housing in the country.

Deepak Kapoor, President, CREDAI-Western U.P. & Director, Gulshan Homz

This decision will not only help clearing up of the unsold stock under the affordable housing segment but also the new projects involving the revised unit sizes. With the majority of homebuyers belonging to the MIG segment and looking for bigger options than those that were available before, this decision will certainly help in meeting the aspirations of this segment of buyers. This step is a great filler for the people who were just not able to avail the benefits of PMAY to purchase their dream house for the lack of choice in unit sizes.

Manoj Gaur, Vice President, CREDAI-National & MD, Gaurs Group

The major chunk of the benefits which will be available because of the changed carpet area will be for the MIG category of buyers. The government has been very proactive towards its mission of Housing for All by 2022 which has been very evident from the reforms which it has been introducing from time to time. Also, with projects registering under RERA and having strict guidelines on their completion, buyers will be more than willing to invest in projects which will offer affordable housing units under the revised carpet areas.

Pradeep Aggarwal, Co-Founder & Chairman, Signature Global

Consumer sentiment for affordable housing has been on the rise ever since the Union Budget 2017 – 18 which has allowed tax benefits, both to the developers and consumers along with easier access to loans at reduced borrowing rates. This was further boosted by the infrastructure status which was accorded to the affordable housing segment which has meant boosted investor sentiment towards the segment. With the renewed brackets of carpet area under PMAY, it will even give affordable housing developers more options to develop and attract further segment of buyers.

Gaurav Gupta, General Secretary, CREDAI – Ghaziabad & Director, SG Estates

The proposed changes in the carpet area of affordable housing projects will give liberty to several developers in this segment to develop bigger units and attract more customers. It will also mean higher demand for ready-to-move-in affordable units falling under these brackets. Also, this will mean the facilitation of higher investments in affordable housing segment which has been accepted very well, both by investors and end users.

Abhishek Bansal, Executive Director, Pacific Group

The sector was witnessing fallout of incomplete projects and loss of buyer and investor confidence. But that is a thing of the past now as the government has been proactively working out ways to develop on these fronts. The average middle class in smaller towns will be able to afford bigger and better quality homes than before and at the same time avail the benefits of CLSS under the PMAY.  

RK Arora, Chairman, Supertech Limited

The decision to increase size of MIG-I and MIG-II category flats under PMAY Scheme will certainly bring cheers and positive sentiment among buyers, developers and housing finance community. For developers, the move will certainly help to clear the unsold inventory whereas the buyers can get more spacious homes and avail the subsidy benefits of Rs 2.50 lakh at accessible rates. The move will help bring demand for affordable housing under the interest subvention scheme.


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