Affordable Housing – Vision For A Stronger Real Estate Market
Housing and urbanisation are the two most important factors contributing to a nation’s economic growth and wellbeing. India’s urban population is growing at a rate of 2.5 percent per year, and about one third of India falls under urbanisation. However, the growth in housing has not been able to keep pace in the previous years with India facing a housing shortage of 22 million homes.
The real estate sector works more like an automobile business; just like there is a Mercedes for the more privileged ones and a Maruti for the lower income group, there should be both luxury and affordable housing too, so as to level the prevailing disparity. Affordable housing in India can mean a wide range of things. Explicitly, affordable housing holds a different connotation for different categories of demographics. However generally it equates to residences that are especially intended for the economically weaker section and lower income group who are looking for security and protection, just like the middle class enjoy.
In the earlier years, the lower income group of our society was not attended to as much as required. However, the present government is constructively taking measures and is coming up with schemes to boost affordable housing. Affordable housing schemes for the middle and lower income groups are finally on a serious growth curve. With the launch of initiatives like 100 New Smart City Projects, Housing for All by 2022, Pradhan Mantri Awas Yojana and various other affordable housing schemes by the government, there can be some tailwind for the sector if implemented efficiently and can result in lowering the demand supply gap that currently exists.
The government is increasingly collaborating with private developers under a public private partnership model (PPP) in order to make Housing for All by 2022 a reality. The government has also raised its budget from 11600 crores to 29043 crores in financial year 2018 towards realizing Housing for All. Additionally, the easy availability of housing finance options provides a good incentive for consumers to take the plunge.
An initiative empowered by the Government of extending 100% tax benefit, particularly for affordable segment ranging from 15 lakh to 50-60 lakh, is definitely a great opportunity for the developers. This is a prime opportunity that should be leveraged as it not only provides them the room to expand business but also boost the real estate sector as a whole. It also brings our country closer to realising the Housing for All mission by 2022 and creating a more developed socio-economic culture by minimizing the disparity concerning upper class to lower class.
Affordable housing also provides a continued focus on smart city projects and this in turn is expected to augur well for the real estate market. Supporting the same is budget 2018, which provides a big relief by establishing a dedicated affordable housing fund under the National Housing Bank.
Last but not the least, the introduction of reformative policies such as the Real Estate Regulation Act (RERA) by the Government to make Indian real estate more credible and organised will instil much needed confidence among both consumer and investors. In the current scenario, affordable housing represents a lucrative investment proposition for the middle and lower income groups and it is expected that more and more developers will be laying greater emphasis on this golden opportunity.
In a country like India where real estate is the second largest employer after agriculture, a slew of growth opportunities will result in increased business for all other sectors of the ecosystem as well. Hence, it would be justifiable to say that real estate is a function of multiple parameters. Adding growth to the overall economy and promoting affordable housing will result in a win-win situation for the real estate sector.