Affordable housing witnesses strong demand, pulled back by slowdown he real estate scenario in India has undergone a sea change in the last two years. The affordable housing segment has seen renewed interest from buyers, however, factors like sky-high property prices, rising inflation, tight monetary policies and increasing costs has pulled down the overall growth. The last two years have witnessed a cascade of issues and challenges in the realty domain. It is expected that in the coming time, the loopholes will be addressed by policymakers, home finance sector which in turn would boost the real estate sector, says Vineet Singh, Business Head of 99acres. The affordable category has the potential to grow further if these issues are resolved. Strong demand for affordable homes Anil Sharma, President of CREDAI NCR believes that there is no shortage of housing demand and the real estate sector in National Capital Region (NCR) is witnessing a strong demand, especially from the age group of 24-35 years for affordable homes. It is because about 70 percent of NCR working population has migrated from various regions of country and forced to pay a huge part of their salary as a house rent. Vivin Samuel Mathew, Regional Business Head - Western Region of VBHC says, “From affordability point of view, the market is still better but the housing above Rs 50 lakh budget range is taking a hit.” As per our data, the searches on the site under the Rs 25 lakh budget category is maximum, standing at 41 per cent during the July to December 2012 period. Second most popular category is Rs 25-50 lakh budget range, with 29 per cent users searching in this type. The Rs 50-75 lakh budget range came in third in the search statistics, as per the site. Reasons for concern The reason for the slowdown is not related to indigenous issues, quip experts but due to “monetary factors such as high lending rate of interest, inflation, slowdown in construction”, among others. More specifically, the key reasons behind the slowdown can be reiterated as under: • Strict monetary regulations due to high inflation • RBI not releasing funds easily making home loans difficult to get by • Property prices reaching peak levels Vijay Kumar Jindal, CMD of SVP Group believes that the economic slowdown has affected the entire industry. Due to rising inflation, falling rupee, new regulations, taxes, budget homes have merely become a dream for new buyers. Some stagnation can be foreseen in the second quarter that has hardly been beneficial for real estate in the last few years. “If we see the ratio of demand and availability, NCR region has options for all types of buyers with property values beginning from Rs 15 lakh onwards at NH 24,” adds Jindal. Solutions Industry sources also point out that if government tries to address the housing demand by lowering prices and contributing to the supply of affordable homes, then the above issues might not be such a big deterrent to growth in the sector. Some steps that experts believe can help improve the scenario are: • Reducing timeliness of projects approval • Single window clearances • Transparency • Subvention schemes in housing • Reducing interest rates The Future On the basis of reports, there is a shortage of about 270 lakh dwelling units and by 2025, shelter would be a matter of huge concern for about 50 crore people. The demand for affordable homes is real but supply can only catch up if government takes proactive steps. “Due to rising cost of materials, technology and labour wages, various projects become an extended affair in India. Various government policies also delay projects since without some approvals or NOC, a builder cannot begin construction work and offer possession,” says Manoj Kumar Goyal, CMD of KDP Buildwell Private Ltd. If the pro activeness increases from the government’s end, the burden on the buyers and developers could be reduced, he added. Local realtor Niraj Agarwal of Niraj Estates points out that that the last two years have been good in terms of prices and transactions but this financial year is likely to bear the brunt of the high that the market has enjoyed in the form of a slowdown. Latest reports have revealed that Delhi Development Authority (DDA) plans to build 10 lakh houses to meet the affordable housing demand by 2021. The developer fraternity is hopeful that this development might address the housing shortage problem and will create a boom in the realty industry. It is reported that in the early phase, seven zones have been selected for the development. These are Zones like J, K1, K2, N, L, P1 and PII that will be spread across the city. For instance, if Zone J is in South Delhi alongside NH 8, Zone L will be developed in Najafgarh of West Delhi. Similarly, Zone PI and PII are alongside the national highway I and zone N is beyond Rohini.
Posted on: Fri, 16 Aug 2013 12:13:42 +0000
Trending Topics
Recently Viewed Topics
© 2015