The affordable housing scheme announced by the Government offering various financial benefits, not only to real estate developers but also first time home buyers, has created steady demand amongst the genuine buyers across major cities. The number of new launches in affordable housing has increased by nearly 100 percent year-on-year, to over 17,000 units across top eight property markets-Delhi, Mumbai, Bangalore, Pune, Kolkata, Chennai, Ahmedabad and Hyderabad.
Demand for affordable homes has grown after the government allowed first-time home buyers an additional deduction while calculating tax liability. The move, which is part of the government's 'Housing for All by 2022' vision, gives first-time home-buyers an additional deduction of Rs 50,000 paid for a loan amount less than Rs 35 lakh and for a house value less than Rs 50 lakh. To support the initiative, many developers have come up with affordable housing schemes at attractive prices and facilities.
The affordable housing in India is determined primarily by the disposable income of the people and caters to the lower income and lower middle class groups. However, now the definition of affordable housing is changing and evolving. India’s affordable housing sector has seen doubled in this financial year with Pune leading the market, followed by Bangalore. Pune has seen the highest supply of affordable housing of around 4,170 units. Delhi NCR, however, recorded a drop of 44 percent in affordable units launched at around 3,000 apartments.
According to a report issued by Cushman & Wakefield, rise in launch prices and unit sizes has led to the average ticket size in Pune to rise to Rs 31 lakh from Rs 23 lakh a year ago. In Bangalore, it has increased to Rs 44 lakh from Rs 35 lakh.
Known as the oxford of the East, Pune stands out in creating substantial demand in affordable housing due to its good infrastructure, better road connectivity and growing job opportunities. With the new airport coming up in Purandar, Zendewadi has become a popular destination for affordable home buyers with improved infrastructure. Other areas such as Bhoirwadi in Hinjewadi, near Shirgaon has also emerged as an affordable home destination.
More projects are expected to come up in the affordable segment, given that there is a cost benefit in development of such projects. Time taken from ground breaking to completion is lower than that for the mid or high-end apartments, while sales momentum is faster, thus helping developers realize their costs earlier than usual. At the end, this will have a cascading impact on the overall economy at large.
Disclaimer: The views expressed in the article are solely of the author and may not represent 99acres.com's opinions on the subject. 99acres.com does not take responsibility for any actions taken based on the information shared by the author.