Affordable housing in India is becoming increasingly difficult for developers to deliver profitably, with rising government charges and construction expenses putting pressure on the segment, according to Hiranandani Group chairman Niranjan Hiranandani.
Speaking at News18’s Rising Bharat Summit in Mumbai, Hiranandani described the decline in affordable housing as a significant economic and social concern. Addressing why established developers are moving away from homes priced below Rs 50 lakh, he said, “Affordable housing has been destroyed. It doesn’t exist.”
Using Mumbai’s property market as an example, he said that for a home priced at Rs 40,000 per sq ft, nearly Rs 20,000 goes towards government charges and levies. He argued that these costs leave developers with limited scope to offer homes at lower prices.
Hiranandani does not anticipate an immediate reduction in government charges, noting that revenue is required to fund infrastructure projects such as roads and metro networks. He also expressed doubts about cuts in stamp duty and ready reckoner rates.
In Mumbai, stamp duty currently stands at 6% for male buyers and 5% for female buyers, including the 1% metro cess. Registration charges are 1% of the property value, capped at Rs 30,000 for homes priced above Rs 30 lakh. Ready reckoner rates for FY 2026-27 have remained unchanged.
Despite affordability concerns, property transactions continue to show activity. Mumbai recorded 15,516 registrations in March 2026, its highest March figure in 14 years, while 40,231 properties were registered during the first quarter.
Hiranandani has previously highlighted the segment’s decline, citing reductions of 15-20% in February and 20% over 24 months in June. He has also pointed to Maharashtra’s pandemic-era stamp duty concessions as an example of possible policy intervention.
While rental housing could offer an alternative model, the immediate challenge remains reducing the upfront cost of homeownership. Industry attention is now turning towards potential government relief and upcoming policy decisions.
Source: Realty Promo
