India, Aug. 21 -- The government's proposed GST reforms aim to streamline rates to just 5% and 18%, with the tax on construction materials like cement likely falling from 28% to 18%. This may ease the overall tax burden on key construction inputs, lowering costs for real estate developers on cement, steel, and other materials, while also simplifying compliance. But will these changes translate into lower housing prices, particularly in the affordable segment?

For affordable housing, currently taxed at 1%, the impact of GST changes would be limited. However, lower input costs, particularly if input tax credits (ITC) are restored, could reduce prices by 2-4%. In the mid-segment, a GST cut from 5% to 3% could bring down prices by 2-3%, an a...