Realty Players warm up to affordable housing
As the real estate market is going through a big churn owing to landmark changes such as RERA and GST, builders are focusing on affordable housing to tide over the slump in the residential segment.Barring a few cities, residential homes sales have suffered across the nation over the past one year and the latest policy changes have further created a ‘wait and watch’ mood in the market with both builders and home buyers waiting for more clarity.
In this backdrop, builders are focusing on affordable housing segment to see movement in the market. The sops being announced by the government towards affordable housing are also playing a major role in attracting builders’ attention.“The prime residential market in metro cities like Mumbai, Bengaluru and Delhi is under pressure. Indian metros rank quite low in order among 41 global cities. Mumbai on a year-on-year price index growth could manage just a positive number, but Bengaluru and Delhi have declined. It is interesting to note Bengaluru, the most resilient market, has also suffered a decline.
The pressure will continue for some more time because we believe the catalysts for growth pertaining to prime residential market are yet to come back,” said Samantak Das, chief economist and national director – research at Knight Frank India.Besides the slump in home sales, potential home buyers have also become very particular about price. This is posing a big challenge to builders, thus driving them to come up with affordable housing projects. According to a Knight Frank report, shortage in urban housing is 1.9 crore units and 95 per cent of this shortage is in the affordable housing segment, thus pointing to the huge potential the segment presents.
Whenever demand for office space rises, new jobs are created leading to demand for homes, says C Shekar Reddy, immediate past president of the Confederation of Real Estate Developers Association of India (Credai).Over the past six months, the office market witnessed sales but the residential segment did not catch up as potential home buyers are waiting for more clarity and lesser prices, putting pressure on both ready-to-occupy units and new launches.