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Why is everyone talking about affordable housing?

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Why is everyone talking about affordable house?

Urbanization and Housing reveal a nation’s economic growth and social well being. India’s urban population is growing at an average 2.1% every year since 2015. It is likely to reach 60 crore by 2031 (up from 37.7 crore today). But the growth in housing has been unable to keep pace. Currently, the housing shortage in India is close to 1.9 crore units. The economically weaker sections (EWSs) and lower-income groups (LIGs) account for 96% of the urban shortage.

Government thrust on affordable housing

The Government of India has recognized the need to fill the gap in urban housing. Large-scale housing projects that are affordable are sure to help. So, the government announced an ambitious project. It seeks to provide ‘Housing for All by 2020’. It has taken many initiatives to make this a reality. For example, it facilitated a 4% interest rate rebate on housing loans of up to Rs 9 lakh. The rebate stands at 3% on loans up to Rs 12 lakh.

Besides, the government granted infrastructure status to affordable housing. Developers can enjoy cheaper sources of funding, including external commercial borrowings (ECBs). Affordable housing promoters will also get more time for project completion. The deadline will increase to five years, up from the current three years.

Developers will also get a year’s time to pay tax on notional rental income on completed but unsold units. The tenure for long-term capital gains for affordable housing has come down too. The new tenure is two years, as against the earlier three.

Change in developer psyche

The spate of initiatives has given a shot in the arm to developers. The segment had been languishing on account of luxury and premium housing for the last few years. Demonetization dealt a severe blow as well. But affordable housing has generated a new source of revenue. It also boosted the confidence and goodwill of real estate developers. Many private players are now undertaking affordable projects

This is a move away from the year 2009 (post the global economic crisis). Back then, developers had no choice but to turn to cheaper housing. The reasons were a severe liquidity crunch and muted demand. The aftermath of the crisis led to the emergence of the concept of ‘affordable housing’. But affordable housing projects had their own set of challenges. These included the lack of land and high construction costs. There was also an unfavorable tax environment. The government’s focus on affordable housing is removing those bottlenecks.

Attractive home loan offers for borrowers
The availability of cheap finance is driving demand as well. The home loan market in India consists of 76 lenders. These include state-run banks, private banks, and housing finance companies (HFCs). All these are trying to woo customers.
New entrants are crowding the space, but HFCs are dominating it. They continue to score over their traditional banking counterparts. How? HFCs are focusing on middle-class and aspiring lower-middle-class borrowers. They lend to people with an annual income that ranges from Rs 2 lakh to Rs 10 lakh.

Leading HFCs are now offering tailor-made affordable housing schemes at 8.5–9%. Borrowers can get a higher loan-to-value (LTV) ratio as well. They can avail up to 85% for housing units that are ready or nearing completion. A traditional bank would offer only 80–85%. Besides, the products of HFCs are more accessible to the self-employed. This includes professionals and small businessmen. Such individuals find it difficult to get credit from a traditional lender.

The demand for low-cost homes should continue over the next decade. The sustained focus of the government and the tailor-made schemes of HFCs are likely to help. All things considered, the target of housing for all by 2022 seems like an achievable target.

Source: Economic Times

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NTR Housing Scheme In Full Swing: Chief Minister N. Chandrababu Naidu

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NTR Housing Scheme In Full Swing: Chief Minister N. Chandrababu Naidu

On Thursday, Andhra Pradesh Chief Minister N. Chandrababu Naidu said with the estimated expense of Rs. 5,556.74 crore, the construction of more than 2,44,164 houses, out of the proposed 3,03,044, has been commenced under the NTR Housing Scheme 2017.

While addressing the second day of the Collectors’ Conference he also said the construction of the remaining houses will begin soon. He mentioned that Prakasam and the Kurnool districts are ahead of the schedule in the urban housing scheme. Also, the works are in full swing in the Nellore and the Guntur districts under the rural housing scheme.

According to Naidu, the government will complete 2.5 lakh houses by January next year and another lot of two lakh houses by June.

By October 2, 2018, the state government intends to finish the construction of all the houses and plans to celebrate with massive house warming ceremony with local public representatives. This will help them set an example for housing schemes in other states.

Also Read: Raunak Group Presents Apna Pehla Ghar Campaign

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A Mumbai Suburbs’ Swift Transformation From Industrial To A Residential Zone: Wadala

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A Mumbai Suburbs’ swift transformation from industrial to a residential zone: Wadala

An industrial zone primarily, Wadala has undergone a drastic transformation in the past decade. Now an upcoming residential area, this Mumbai suburb is one of the seven islands to form the modern Mumbai. It is located on the Harbour line of Mumbai’s railway network.

Due to its proximity to BKC, large scale land development was inevitable, thus fueling the real estate market. Wadala is bordered by Dadar on the West, Matunga on the Northwest and Sewri on the South. Nestled between south Mumbai and the suburbs, Wadala enjoys strong connectivity by road and rail to most parts of Mumbai.

It has a number of flyovers like the Anik Panjrapol Link Road, Elevated road and Santacruz flyover. Thane, CST and Chembur are connected via the Eastern Highway while the Western Highway connects the locality to Bandra and Borivali. Wadala has the biggest bus depot in Mumbai. Furthermore, the multiple infrastructure initiatives like the monorail, Truck Terminal and the expansion of Highway are in various stages of development.

All this has given rise to residential demand and pushed the property value over the last few years. One of the most populated areas in Mumbai, Wadala has a large number of old temples, churches and dargahs, university campuses, schools, reputed hospitals and is also home to a former world’s largest IMAX dome theater. There are many stores, showrooms and malls around Wadala like the R Mall, High Street Phoenix and Palladium Mall.

Ramesh Nair, COO – business and international director, JLL India says, “A decade ago, property prices at Wadala were as low as Rs 2,800 per sq. ft. and it rose to Rs 14,000 a few years ago.”  As the infrastructure plans are on their way, so are the renowned developers like Ajmera, Dosti Group and Lodha Group among others.

Wadala at present offers one of the highest returns on real estate investments in the region. All the above-mentioned developers have their luxury projects in the area.

Ajmera I-Land introduces Aeon, Zeon and Treon towers with 2, 3 and 4 BHK plush homes. Conceptualized by renowned Singapore based Architects Space Matrix, these spaces with top-of-the-line lifestyle amenities exude exemplary class and finesse. The first residential floor begins at 110 feet from the ground level and offers several modern lifestyle amenities like kid’s pool, swimming pool, gymnasium, club house, open space and landscaped gardens, yoga room, kid’s play area and senior citizen corner.

Dosti Ambrosia is a 36-storey tower nestled in the 18 Acre Township of Dosti Acres. The architecture of the project was undertaken by renowned Hafeez Contractor in the 2 and 3 BHK apartments. It offers an exclusive rooftop swimming pool with 40,000 sq. ft. of landscaped gardens. You will find all modern conveniences like Gymnasium, Tennis Court, Indoor Badminton Court, Yoga and Meditation Room, Elderly Corner, Banquet Hall, Indoor Games, Indoor Badminton Court, Guest Rooms, Restaurant, Grand Entrance Lobby, Kids Play Area, 2 Club Houses and an Amphitheatre.

New Cuffe Parade by Lodha Group offers its residents all the comforts of a world-class lifestyle. The 2 and 3 BHK homes are spread in over 23 acres of land with 15 acres of stunning landscape and 75,000 sq. ft. of the club house. It includes 11 swimming pools, an organic farm, cricket pitch and multiple themed gardens. The buildings are designed by the world renowned WOHA in Singapore and the landscape was planned by Sitetectonix in Singapore.

Also Read: Mumbai to get Building Taller than Burj Khalifa, Road Bigger than Marine Drive

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Rajasthan Government May Hike The Affordable Housing Prices

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Rajasthan Government May Hike The Affordable Housing Prices

The prices of homes under the ambitious Mukhyamantri Jan Awas Yojana are expected to be increased by the state government.

According to the sources in the empowered committee meeting to be held on Monday, a proposal to increase the cost of a low-income group (LIG) and economic weaker section (EWS) houses will be proposed. Urban development and housing (UDH) minister Srichand Kriplani will chair the meeting. The LIG and EWS houses, presently are being constructed on government lands by private builders. These homes are sold at a fixed rate of Rs 1,250 per sq feet; out of which 1000 rupees per sq ft is given by Urban Improvement Trust (UIT), development authorities and local bodies to the builders.

According to provision 4(A) and 4(B), the developers are supposed to build EWS and LIG houses on government land. Seventy-five percent of such government land can be used in building EWS and LIG houses, while the remaining 25% can be sold by the developers. However, since the rates provided by the government are less the developers are not showing interest to construct houses under these categories. Sources said, “In Jaipur, not a single developer has shown interest in constructing houses under this model. The JDA has invited expression of interest (EOI) several times.”

The UDH is leaving no stone unturned to attract the builders in order to achieve the target of constructing 10 lakh houses by 2019. The sources mentioned, “As per the new proposal, the department has proposed to provide Rs 1,600 per sq feet rate to the developers. The land rates have increased subsequently over the period of time; this is why increasing rates has become a need of the hour.”

Sources further added, “The developers are constructing G+3 buildings at present. However, it is not cost-effective. It has been proposed to construct G+2 buildings for LIG and EWS category.”

Also Read: The Impact Of Regulations On The Real Estate Market

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