Affordable Housing Needs Government Support, Says Keystone Realtors’ Boman Irani

Builders are facing growing challenges in developing affordable housing projects without government support due to a lack of incentives, according to Boman Irani, Chairman and Managing Director of Keystone Realtors Ltd. (Rustomjee Group).

Speaking to NDTV Profit, Irani pointed out that the sector requires government support, particularly in terms of Goods and Services Tax benefits.

“What that means is if I am going to pay premiums that are super heavy, and I am not going to get the advantage of GST because affordable housing is classified as Rs 45 lakhs and below, you are not going to see a developer who now works on volumes and is trying to work on a cost plus,” he explained.

Attributing these challenges to the downward trend in supply of affordable housing, Irani further added, “You are not going to see the kind of growth coming over there. That is why developers who find it less and less manageable to be able to do affordable housing are getting out of it.”

In December, a joint report by CII and Knight Frank had flagged that India is projected to face an affordable housing shortage of 31.2 million units by 2030. 

The existing shortage stands at 10.1 million units. The segment has a potential market size of Rs 67 trillion. However, impending challenges are making developers wary of tapping into this opportunity. 

“If you allow me to launch projects that are in the affordable space, developers like myself will happily do it,” Irani said, citing the example of the company’s latest project in Dombivali, Thane.

The launch of the project will help Keystone Realtors Limited to tap into a whole new market, he emphasised. Located in Dombivali East, the project will offer 2, 3, and 3.5 BHK apartments, with size units ranging from 485 to 950 square feet. According to their website, the price range starts from Rs 49.00 lakhs. Spread over 100 acres, the costliest units of the project are priced at Rs 1.34 crore.

Irani also discussed the potential of Navi Mumbai and South Mumbai as emerging attractive destinations. 

“Mumbai Metropolitan Region (MMR) by itself is a fantastically deep and wide market. Do I need to move out of this area? No. Will I do it? Yes. At all points in time, we have been evaluating projects in the close vicinity of MMR itself so that we can spread our wings and grow there,” Irani said.

Shares of Keystone Realtors were 0.72% down at Rs 518.65 apiece on the NSE, in comparison to a 0.38% decline in Nifty 50 at 22,035.55 as of 9:45 a.m.