Developers eye affordable realty to ease note ban pain

Mumbai: Affordable housing has got a boost as the high-end luxury and upper-middle income housing real estate markets are down and have been down for the last two to three years with the recent demonetisation being a mixed bag.

According to one estimate just 20-30 per cent of housing in this segment have been sold and the rest are lying idle specially in metros like Delhi, Mumbai and Bengaluru.

On the other hand, there is an estimated need for two crore affordable housing units by 2022 across the country and with the government offering various sops in order to achieve the Prime Minister’s ‘Housing for All’ vision, developers are turning to affordable housing. The infrastructure status given to this segment, means lower income housing gets support like lower stamp duty, cheaper loans against the present over 20 per cent interest rate.

Confirming this, Manju Yagnik, vice-chairperson, Nahar Group, said developers are abandoning projects that are on the anvil or redesigning projects on the designing board to suit the demand for affordable housing.

Investors are out of the market partly because of the demonetisation and the investor-unfriendly policies of the government. Rental income is modest – for instance an investment of Rs 1 crore nets an in come of just Rs 4,000 a month which is not economical. Property appreciation is also not significant.

Rahul Nahar, founder of Xrbia Developers, said they shifted from developing complexes for gated communities to catering to the lower end of the pyramid, (housing worth between Rs 10-50 lakhs)  which is witnessing 90 per cent of the sales. This segment, he said has been growing 60 per cent annually and is 100 per cent this year.