The Big Leap in Affordable Housing
Authored by Rohit Poddar, Managing Director, Poddar Housing and Development and Joint secretary, NAREDCO Maharashtra.
Housing has been one of the key business drivers for the real estate sector. From renting a property to owning one, homes play an essential role for many. With the growing urban population, rising prices and lack of affordable land bank in the city, it has been difficult to address the demand and supply gap of Housing. As a solution, developers are creating budget-friendly properties in the suburban areas and central peripheral areas of Mumbai like Kalyan and Badlapur with self-sustaining townships to ensure that the demands are well addressed. The affordable housing segment has taken a center stage in the housing markets across the country but there’s still a huge gap in the demand and supply of affordable units. Hence, Government has also taken several measures like Indira Awas Yojana (IAY) in 1985 and Pradhan Mantri Awas Yojana (PMAY) in 2015 to boost the public housing program in India. The current government in the center aims to make housing affordable for everyone and aspires to provide a roof to every citizen, irrespective of their socio-economic status by March 2022 with Housing for All initiative.
There is a raft of reasons for this; land acquisition at an affordable price in the urban areas is becoming more and more difficult for the developers. Similarly, the existing infrastructure of these urban areas is inadequate to accommodate the ever-growing urban population and demand for homes. The lengthy and strenuous approval process for projects makes the progress very tardy. Rising construction costs, constantly changing regulations and the dearth of access to home finance for low-income groups is constrained on the demand side. The optimism for the affordable housing segment is picking up rapidly due to a large migrant population. Affordable housing has already been given the vital infrastructure status in the Union Budget 2017-18, which has enabled the developers to have diverse and cheaper sources of funding, including external commercial borrowings (ECBs).
Developers need to understand the importance of Customer-Centric approach while they design a project. This approach enables us to anticipate customer’s immediate needs and create projects that ease the living experience of the home buyer. Often home buyers look for amenities that are beyond that enhance their lifestyle and add quality to life. Today, most of the affordable homes come with plethora of amenities that address the needs of the home buyer. With changing lifestyles and per capita income, amenities are given more importance while choosing a property. A big leap is witnessed among the construction community where buyers now seek healthy livable spaces that are well equipped with amenities like clubhouse, jogging area, children play area, hospitals and schools in vicinity rather than a simple standalone apartment with no amenities. This kind of projects have covered a huge ground in the Sub-urban region. Thus, the developers are shifting their focus from stand-alone projects to townships.
Considering the space constraints in a city like Mumbai, peripheral areas like Badlapur, Kalyan and Dombivli are gaining prominence as social and physical infrastructure is undergoing tremendous development in these regions. Existing and upcoming townships along with commercial projects have attracted quite a lot of customers in and around the area. These regions have observed considerable growth and attraction mainly due to low real estate prices and excellent rail connectivity. An upcoming infrastructure development like Airoli – Kalyan elevated corridor via Parsik Hill and the Navi Mumbai international airport will transform the locations in the days to come.
Other peripheral areas like Mira-Bhayandar, Vasai- Virar have witnessed huge investments in during 2018-2019.With the proposed investment of the government, the affordable housing may go beyond Ambernath, Panvel and Virar and provide new hotspots to drive growth in the sector. These new reforms can be best harnessed if corporate India and the government work more closely together and create more opportunities to develop the country at a higher pace.
Although, 2019 was a period of ups and downs for the real estate sector due to ongoing liquidity crisis and slow pace of recovery via sales housing sales saw a modest 4% – 5% annual growth with over 2.58 lakh homes sold during the year. Affordable housing acquired the center stage in 2019 thanks to multiple government sops throughout the year. As of now, more than 9 million houses have been sanctioned under the PMAY scheme out of which almost 30% of houses have been built and more than 60% of sanctioned housing units are underway. More than 90% of the completed projects have been delivered to the end consumers. The rate at which houses are being built may not be enough to meet the target as there are still too many projects stuck on various stages of approvals. Quick approvals along with moderate use of new construction technologies can help in achieving the target of ‘Housing for all’.