In India, the affordability of a home can be judged on three broad factors, – the monthly income of the prospective buyer from the target segment, the size of the home and, of course, its price. There is another factor that should be mentioned, which is namely the target clientele itself.
In most developed nations, people own houses and cars are taken on the basis of long-term rent or leases. In India, it is the opposite where people live in rented accommodation and own cars and bikes. This situation arises because the auto industry has high-quality bikes or cars for every segment in the auto sector whereas there is no such thing available in the real estate sector for houses. Buying a house or living in one’s own house is a necessity and should not be considered as a luxury. In a country like India, this is a dream, which every individual has to possess his own house.
The growing economy has witnessed a lot of demand for housing. At present, approximately 32% of the Indian population resides in urban areas. This statistics will only see a steady rise in the coming years. Therefore, the demand for housing will also increase. The demand for affordable housing has also been high, but the supply for affordable housing is limited. The government recently showed interest and launched initiatives like 100 new Smart City projects, Housing for All by 2022, Pradhan Mantri Awas Yojana (PMAY) and various affordable housing schemes by many state governments. The affordable housing sector is believed to be the next big thing in the Indian economy and a game changer for the real estate sector.
As a result of the policy changes, financial support, initiatives and schemed introduced by the government of India, normal the demand for affordable housing, more and more developers are finding this sector profitable. Government policy like RERA (Real Estate Regulatory Authority) has inspired home buyer’s confidence. This biggest obstacle faced for the success of affordable housing is the unlocking of land in the urban areas. Unless land is available, creating affordable housing will only be a dream.
Best Cities with Affordable Housing: The Indian Government’s aim to provide ‘Housing for All’ is a mission of building affordable homes across India. For this purpose, three cities have been selected that offer a wide range of affordable housing options that promise future healthy returns. A price range of 20-40 lakhs has been considered as an affordable range to appraise the cities.
-According to a recent study, Bangalore tops the list of the most affordable housing options in India with more than 77% of total units under construction falling below the price of 50 lakhs. Bangalore continues to hold great prospective for further development of affordable housing projects due to the huge demand, particularly from the low-mid level income groups. The city will continue to see more affordable housing projects in locations such as Hosur, Road, Doddaballapur Road, Off KR Puram Road, Kanakapura Road (after NICE Road) and Tumkur Road due to the availability of land at relatively cheaper prices.
-Chennai follows closely at 75% and takes the second spot after Bangalore. Some of the recently launched affordable housing projects in Chennai are as follows:
• En Veedu by XS Real Properties: This is the State’s first PMAY compliant project with 475 units priced at 5-10 lakhs.
• VGN Dynasty at Avadi – The rates of this project are below Rs. 30 lakhs with 2-bedroom apartments ranging between 650 to 750 sq.ft available at Rs. 2700 per sq. ft and located just 2 km away from Avadi-Poonamallee High Road.
• TVH Svaya at Sriperumbudur – A project with both 1 to 2 bedroom apartments ideal for people working in the Sriperumbudur industrial region located just 3.1 km from Tambaram Highway with homes within 560 – 1085 sq.ft that are available at a rate of Rs. 2727 per sq.ft onwards.
-NCR is a large territory, which surrounds districts of Rajasthan, Haryana and Uttar Pradesh. Due to the vast region, there are numerous areas in NCR where affordable houses (less than 40 lakhs) are available. The top 5 affordable markets in NCR are as follows:
• Sohna – Near Gurugram, Harayana
• Rajnagar Extension – Ghaziabad, Uttar Pradesh
• Bhiwadi – Rajasthan
• Greater Noida West – Uttar Pradesh
• Yamuna Expressway – Uttar Pradesh
-Hyderabad offers a host of affordable housing options across several micro markets. Established residential localities such as Manikonda, Sainikpuri, Miyapur and Kukatpally offer housing options in the range of Rs. 30-40 lakhs. The government of Telangana has been successful in implementing various measures to allure local as well as international investments to Hyderabad. Sound infrastructure, a growing workforce and competitive real estate prices have tipped the scales in favour of the city. The IT industry has been the most leading growth factor for real estate, leading to a constant demand for both residential, commercial as well as retail spaces.
-Ahmedabad is considered as one of the upcoming markets for the affordable housing sector in India. Major supply of properties in the bracket of Rs 20 to 40 lakhs is situated in the areas of Nava Naroda, Nana Chiloda, Chandkheda, Gota, and Motera. The price of the units varies from Rs. 1,700 to 3,100 / sq ft. Other than the demand locally, demand due to the petro-chemical, oil, gas, energy and automobile industries are some of the major drivers in the city. Due to various institutions of national importance like IIM, CEPT, Nirma University, Gujarat University being located in Ahmedabad, the rental market is flourishing rental market, which is driven by both students and staff.
The move to provide affordable housing to India’s 1.3 billion people is at the epicenter of India’s real estate movement. The housing shortage in India is set at 1.9 crore units and the government has recognized the need to fill the gap in urban housing. An increase in affordability is converting the demand for affordable apartments on Ferozepur highway into a commercially feasible opportunity. With the Indian Government promoting affordable housing with its various initiatives and schemes, regulatory support, rising urbanization, financial and policy thrust, it will not be long before every individual will have the pleasure of owning of living in the comfort of his or her own house.