When housing gets affordable

So you thought, housing (read property investment) prices were going to go through the roof like everything in India has been relatively? Well, the present government has an eye on the future and have declared an affordable housing scheme. It’s called the Pradhan Mantri Awas Yojna which aims to provide shelter to all in India! This is a move towards builders therefore building more affordable housing.
Anyway, while the ‘Aaam Admi’ has his eyes on these particular government plans, elsewhere too builders are realising that they need to harness the investment potential of the average and moderate middle income groups. Even the lower income groups are being taken into the ‘umbrella,’ a 4% interest rate rebate being offered for housing loans upto Rs 9 lakh and 3% for upto Rs. 12 lakh.
Even developers are being offered incentives. Affordable housing has now been granted infrastructure status by the government, therefore developers can enjoy cheaper sources of funding, including external commercial borrowings. Such properties will also be allowed more completion time, thus raising completion from three years to five years.
Sources of finance for borrowers (those wanting to buy) are also many, including state run banks, private banks and housing finance companies. So all in all, the picture looks very good for a prospective and needy buyer from the middle and low income groups who starts to see it as a seamless process of acquiring property. With the consistency in sales achieved, developers too are encouraged to build and fearlessly posit properties that they know will not be difficult to sell in the affordable housing categories.
The Housing Finance Companies stand out quite well, who are offering housing schemes at 8.5 to 9 percent. Things are looking up even in terms of the percentage of finance buyers can avail, now standing at 85% percent of the housing units that are ready or nearing completion. The HFCs also pose a ready source for loans where otherwise the self employed, professionals or small businessmen would find it hard to get them from a traditional money lender.
India’s urban population is growing at an average of 2.1 percent every year. By 2031, it will reach 60 crores (is today 37.7 crore). The government and in turn the developers have realised that 1.9 crore families have not bought homes due to the non affordability so far. Therefore they are doing the utmost for developers to embrace constructing affordable housing plans. Ninety-six percent of those buying are economically challenged groups. Therefore, developers will rush to implement feasible housing plans.
In all this, there is scope for someone in one of the higher middle income groups to have options of property that earlier seemed ‘just out of commonsense economic range’ even if affordable. Now they will be less reluctant buyers. So, smell the coffee beans! Your dream investments are now going to be extremely affordable.
So you thought, housing (read property investment) prices were going to go through the roof like everything in India has been relatively? Well, the present government has an eye on the future and have declared an affordable housing scheme. It’s called the Pradhan Mantri Awas Yojna which aims to provide shelter to all in India! This is a move towards builders therefore building more affordable housing.
Anyway, while the ‘Aaam Admi’ has his eyes on these particular government plans, elsewhere too builders are realising that they need to harness the investment potential of the average and moderate middle income groups. Even the lower income groups are being taken into the ‘umbrella,’ a 4% interest rate rebate being offered for housing loans upto Rs 9 lakh and 3% for upto Rs. 12 lakh.
Even developers are being offered incentives. Affordable housing has now been granted infrastructure status by the government, therefore developers can enjoy cheaper sources of funding, including external commercial borrowings. Such properties will also be allowed more completion time, thus raising completion from three years to five years.
Sources of finance for borrowers (those wanting to buy) are also many, including state run banks, private banks and housing finance companies. So all in all, the picture looks very good for a prospective and needy buyer from the middle and low income groups who starts to see it as a seamless process of acquiring property. With the consistency in sales achieved, developers too are encouraged to build and fearlessly posit properties that they know will not be difficult to sell in the affordable housing categories.
The Housing Finance Companies stand out quite well, who are offering housing schemes at 8.5 to 9 percent. Things are looking up even in terms of the percentage of finance buyers can avail, now standing at 85% percent of the housing units that are ready or nearing completion. The HFCs also pose a ready source for loans where otherwise the self employed, professionals or small businessmen would find it hard to get them from a traditional money lender.
India’s urban population is growing at an average of 2.1 percent every year. By 2031, it will reach 60 crores (is today 37.7 crore). The government and in turn the developers have realised that 1.9 crore families have not bought homes due to the non affordability so far. Therefore they are doing the utmost for developers to embrace constructing affordable housing plans. Ninety-six percent of those buying are economically challenged groups. Therefore, developers will rush to implement feasible housing plans.
In all this, there is scope for someone in one of the higher middle income groups to have options of property that earlier seemed ‘just out of commonsense economic range’ even if affordable. Now they will be less reluctant buyers. So, smell the coffee beans! Your dream investments are now going to be extremely affordable.

Author: Vikram Afzalpulkar @PropertyAngel