Indian real estate has a new blue-eyed boy. And this blue-eyed boy seems to be going to pull the industry out of the slump.
Due to goods and services tax (GST) benefit and a preferable price range, homes costing up to ₹45 lakh have emerged as the sweet spot for builders and buyers alike in the past few years. The segment which is broadly called as affordable housing segment is expected to remain the focus of attention for time to come.
Government’s push on affordable housing has now started to show results. The policies have made it easier to buy homes, particularly for first-time buyers, through steps such as reducing the concessional GST rate from 8% to 1% on under-construction affordable homes. Additionally, reducing interest rates deduction up to ₹3.5 lakh, compared with ₹2 lakh previously, for homes priced up to ₹45 lakh and having a carpet area up to of 60sqmt has provided added benefits to the buyers.
Affordable housing or homes upto Rs. 45 lakhs seemed unreasonable and impractical when the idea was first introduced, especially in tier I and II cities where property prices are very high. Many developers were not very enthusiastic about the segment owing to lower profit margin and high cost.
However, the segment became quite a popular one among buyers, especially the first timers. Even an expensive market like the Mumbai Metropolitan Region (MMR), 30,000 one BHKs were reportedly sold in the last financial year.
Evidently, while developers were complaining about reduced demand, the problem seemed to be the skewed supply. Until a couple of years ago, the housing segment in India usually saw the bulk supply in mid and upper income segment.
Seeing the potential in the category, developers are now opening to the idea and are coming up with various affordable housing projects. As per Anarock Property Consultants, between January and June 2019, MMR topped the list of seven metros with the highest launches of 17,700 homes (priced below ₹45 lakh and 60sq. m). Pune came second and the National Capital Region (NCR) third, with 9,350 and 6,970 units launched, respectively, during the period, Live Mint reported.
If adequate infrastructure is present, affordable housing projects are selling as hot cakes in the market. Like, Poddar Housing launched 300 residential units of 350sq. ft at around ₹20 lakh each in Badlapur, a suburb of Mumbai, this year and sold all of them. Here are some more developers ready to plunge in the homes up to Rs. 45 lakh:
· VBHC Value Homes Ltd, New Panvel, Navi Mumbai- ₹20-45 lakh
· Vatika India Next 2, Gurugram- ₹10-20 lakh
· Shriram Properties Ltd, Bengaluru- ₹30-40 lakh
· Ozone Group, Bengaluru- less than ₹45 lakh
Here is more on affordable housing.