10 Jun Affordable Housing Opportunities For A Promising Future
The realty market expected to see a significant revival after the new government came into power two years back. A quick reversal from the downward graph has not been the trend so far despite the announcement of ‘Housing for All by 2022’ and other measures to promote affordable housing into the limelight. However, all is not lost as some Tier-II and III markets have observed a rise in demand in the affordable housing segment.Though the developers are still struggling to reduce their unsold stock there has been a marginal pick-up in sales.
A real estate consulting firm Liases Foras, released a report recently indicating a 22 percent rise in unsold stock in eight big housing markets. Therefore, the current trend is focused on completion of the existing projects and launching newer ones.
A Steady Growth in Demand
In spite of the growing pressure, there have been positive signs of recovery across the real estate market. The report also pointed out that for the first time in eight quarters, sales crossed 60,000 units across eight cities by the end of March 2016. Also, according to the data released by the Reserve Bank of India, the credit deployment to the housing sector shows a rise in loans. It had declined to below 15% in 2014 but, there has been a rise over a period of five months from November 2015 to March 2016 as the credit flow to the real estate sector sustained a growth rate of more than 18%.
Affordable Housing Sector Looking Up
The steady growth in demand has given rise to new projects in the sector. According to the Laises Foras report, real estate developers are trying to answer the growing demand in the affordable housing sector. Thus, there has been a rising trend of new projects being launched in the price segment between Rs 25 lakh and Rs 50 lakh.
An improvement in house affordability has been noticed due to growing income and reasonable interest rates given by banks on home loans.
The report also points out that due to rapid urbanization and preference of tier 1 and tier 2 cities, for settling down, there has been an increase in the demand for residential properties by 6%. The rise in sales was as follows:
- Delhi NCR – 33%
- Mumbai – 12%
- Ahmedabad – 32%
- Chennai – 25%,
- Hyderabad – 20%
- Kolkata – 14%.
Price stagnation, reasonable interest rates and government schemes have been designed to create a growth environment for real estate developers and enable home buyers to purchase a residential property easily. Now, it can be said that it is comparatively easier to buy residential property in Kolkata than it was one year back. The gap between the affordability and the prices of apartments has significantly narrowed. To attract home buyers and tap the growing demand, real estate developers are offering attractive offers and easy payment opportunities. If the growth is maintained by the realty market, the affordable housing sector has a bright future to look forward to.