Affordable housing in India is going through some interesting times. Real estate developers are building apartments in smaller configurations with the goal of offering budget homes by reducing the average size of an apartment and thus lowering apartment prices. They are focusing on consumer requirements rather than offering premium apartments by launching the right type of apartment at an affordable price.
With the continuous rise in house prices in India between 2005 and 2008, consumer affordability has come into question and the situation continues even now despite lower interest rates on home loans and increased supply due to to high land prices and other charges. Based on real-time feedback from property buyers, developers have also been changing their strategy to attract a good response from home buyers.
The most significant development in this segment was the granting of infrastructure status in the Union Budget 2017-18, which is expected to boost property developers by giving access to cheaper sources of finance and reducing the price of loans. Another push from the government was the new public-private partnership (PPP) policy announced to attract the attention of private investment. These initiatives that the Government has taken clearly indicate the vision and mission of “Housing for All” by 2022. However, the real estate sector still needs various policies and regulations necessary to promote better coordination between the stakeholders in housing and the rationalization of various fees and taxes. .
Many steps have been taken to encourage real estate developers through various incentives, tax breaks, subsidies, and most importantly, institutional financing, and are therefore likely to stimulate growth in the affordable housing sector. in India. This Sector reflected a growth of 27% between January to September 2017 compared to an overall reduction of residential housing of 33%. This is probably due to an implementation of PMAY-HFA;
Affordable housing finance is estimated to be a 6 lakh crore business opportunity by the year 2022, when the Indian government seeks to achieve housing for all Indian citizens. The Government has launched various initiatives to boost this segment across India. The data shows a strong increase in loan disbursements and the launch of new real estate projects in this segment in 2016-17. Credit-linked subsidy policies proved to be quite helpful in improving the affordability factor among the economically backward Section. No doubt, the initiatives of the Indian Government taken to boost the affordable housing sector in India will give new impetus to the real estate industry.