Affordable Housing A house for everyone
Affordable housing refers to housing units that are affordable by that section of society whose income is below the median household income. Disposable income of the people remains the primary factor in determining the affordability. As a result, it becomes the increased responsibility of the government to cater to the rising demand for affordable housing. The Government of India has taken various measures to meet the increased demand for affordable housing along with some developers and stressing on public-private partnerships (PPP) for development of these units.
Affordable housing schemes for the middle- and lower-income groups are on a serious growth curve in 2017, with huge demand in both segments now also being met with increasing supply. It might seem strange that massive demand and massive unsold residential inventory can co-exist, but this is the result of pricing mismatch. The highest demand for housing in India has always been and continues to be in the affordable segment where property prices range from Rs 15 lakh to Rs 50-60 lakh, while a huge number of ready-to-move projects in cities like Mumbai are priced upwards of Rs 1 crore. This is a stalemate situation for the existing supply — having invested heavily in location and premium features and amenities, the developers of these projects can obviously not bring the prices of their inventory down into the affordable brackets.
The biggest challenge to create affordable housing is the unlocking of land in urban areas. Unless adequate land is made available, creating 2 crore homes may be a distant dream. According to an estimate, close to 57,392 acres will be required to build the 2 crore homes, if one were to assume a size of 500 sq ft per home and an available floor space index (FSI) of 4. This will require unlocking non-essential lands currently being held by large government bodies. The government’s financial and policy thrust, regulatory support, rising urbanization, and increasing affordability is converting demand for affordable homes into a commercially viable opportunity. The sun is finally rising on the affordable housing segment and propfrill recommend investors to invest in this scheme.