Realty developers are increasingly focusing on building value homes, or affordable housing, to drive sales even as the larger property market continues to reel under slow down.
While there has been a major dip in new launches in the mid-to-luxury segment, the value-housing segment posted an increase of 22% to more than 36,300 units last year, a Cushman and Wakefield report said.
“The clarity on affordable housing’s definition provided by the government in this year’s Union Budget along with the benefits accruing from the infrastructure status to affordable housing projects should bring in a spurt in new launches in the later part of the year, albeit these are most likely to be in suburban and peripheral locations,“ said Anshul Jain, managing director, India, Cushman & Wakefield.
Further, the ticket values of new units being launched may see some changesthis year. In majority of the cities, developers have sought to rationalise ticket sizes of value homes to make them further affordable for home buyers.
Apart from ticket sizes, lower or discounted prices are prompting home buyers to act as many of them are actually waiting for the same.
“Response to affordable housing has been good, and going forward, with the government’s thrust on this segment, demand and sales conclusion will continue to get better, providing the much-needed push to the entire realty sector. A combination of comfortable size and lower prices has helped us in selling over 700 units worth over Rs 350 crore in our three launches in 2016,“ said Ashok Chhajer, MD, Arihant Superstructures. The segment is expected to receive a boost with government looking to waive off the stamp duty and assigning infrastructure status to the segment.
“Exempting stamp duty for affordable housing will boost the growth of this sector. This will reduce the end cost for the buyer, making affordable housing more attractive. We look forward to the state government’s speedy implementation of this exemption to ensure that the benefit is passed on to the customers,“ said Ashish Puravankara, managing director, Puravankara Projects. According to JLL India, builders of budget housing now have access to cheaper sources of funds, thanks to the newly granted infrastructure status.
As per statistics, the shortage of housing currently stands at around 1.87 crore homes, and nearly 95% of the shortage is in the affordable segment. Now, developers can and will focus more on launchingprojects in this segment, where most of the demand lies.
The end user is the biggest beneficiary out of this Budget.
While individuals falling in the lower income slab of up to Rs 5 lakh have been given tax benefits, the massive push to affordable housing also ensures that the dream of owning a home will soon become a reality for many more.
(source by:-The Economic Times)