CREDAI Vows to Pass GST Rate Cut Benefits to Homebuyers: A Boost for Affordable Housing in Smaller Cities
The Indian real estate sector has welcomed a major announcement from the Confederation of Real Estate Developers’ Associations of India (CREDAI). The apex body of private real estate developers has assured that the benefits of the recent GST rate cuts will be passed on to homebuyers, potentially making homes more affordable—especially in smaller cities and emerging housing markets.
This move is expected to provide relief to both developers and buyers, at a time when high construction costs and financing challenges continue to impact the sector.
What the GST Rate Cut Means for Real Estate
The reduction in Goods and Services Tax (GST) rates on key construction materials like cement, tiles, and granite could lower overall project costs. Earlier, GST had been a burden that developers often absorbed, but with the revised structure:
- Cement GST reduced from 28% to 18%
- Bricks/Tiles GST reduced from 18% to 5%
- Granite/Marble GST reduced from 12% to 5%
For a mid-sized housing project worth ₹100 crore, this could translate into 3–5% savings in construction cost, i.e., around ₹3–5 crore in reduced expenses.
CREDAI’s Commitment: Passing the Benefits to Buyers
According to CREDAI, its members are committed to ensuring that the savings from GST cuts are not pocketed by developers but instead reflected in the final price for homebuyers.
For buyers in Tier 2 and Tier 3 cities, where affordability is a key factor in purchase decisions, this could reduce the entry price of homes and make EMIs more manageable.
Some developers may pass the benefit directly as price reductions, while others may offer it as value upgrades—such as modular kitchens, wardrobes, branded fittings, or home automation features.
Impact on Smaller Cities and Affordable Housing
While metro markets like Delhi, Mumbai, and Bengaluru are largely driven by premium and luxury housing, it is the smaller cities like Noida, Sohna, Indore, Jaipur, and Lucknow where GST savings could have the most visible impact.
Here’s why:
- Affordable housing dominates demand in smaller cities, with ticket sizes under ₹50 lakh to ₹1 crore.
- Even a 1–2% price reduction can make a significant difference to a buyer’s monthly EMI burden.
- CREDAI’s initiative could boost sales velocity in these markets, giving both buyers and developers a win-win outcome.
Industry Experts Weigh In
Real estate analysts point out that while GST savings are helpful, the larger affordability challenge lies in home loan interest rates. Still, any reduction in upfront property costs strengthens buyer confidence.
- Buyers: Can expect lower effective prices in upcoming launches, particularly in mid-income and affordable housing projects.
- Developers: Get relief in construction costs and can use GST savings as a marketing tool to attract buyers in competitive markets.
- Smaller Cities: Likely to see more project launches, as reduced costs improve project viability.
Ramji Corp Perspective
At Ramji Corp, we believe this development is a positive step for India’s real estate sector. As a brand committed to Quality, Value, and Assets Forever, we see the GST rate cuts as an opportunity to deliver more value-driven homes for families across South Delhi and NCR markets.
For our upcoming projects, including Radhaya Urbanity on MG Road, Aaya Nagar, South Delhi, we are exploring ways to integrate GST benefits into pricing and premium features—ensuring that our buyers feel the direct impact of this policy shift.
Conclusion
The GST rate cut combined with CREDAI’s vow to pass on benefits marks a turning point for the Indian real estate sector. While affordability will still depend heavily on home loan rates and EMI structures, the reduction in property costs is a welcome move for thousands of families aspiring to buy their dream homes.