With affordable housing set to drive the Indian real estate market for the next decade, the maximum supply and demand is currently being driven by the 900-1200 sqft segment. The 300-600 sqft apartments which also attract credit linked subsidies for those with a salary level of upto Rs.6 lakh is expected to soon be transacted in the formal market, revealed thelatest report – Affordable Housing Policy Perspective 2017 – by India’s No.1 property site Magicbricks.
Affordable Housing Policy Perspective 2017 is an earnest effort by Magicbricks that puts the focus on affordable housing and its multiple facets. The report also gives a deep insight to consumers on what affordable housing is all about, policy changes, informal renting, taxation on vacant property and the benefits of Pradhan MantriAwaasYojana (PMAY).
Affordable Housing Policy Perspective 2017revealed that for the first time there is a sync between demand and supply. This has been due to the slow demand movement and rising levels of completed stocks entering the market. Demand has now rationalized and supply in the market is now in various stages of completion.
Affordable Housing Policy Perspective 2017also highlighted that the major chunk of supply and demand currently was in the 900-1200 sqft property that would classify as MIG 1 and 2 under the government categorization for CLSS benefits. This segment has accounted for more than 40% of the demand in urban India in the January-March 2017 quarter.The sizes of 1350-1500 also accounted for about 14% of demand.
The report also stated that between the 300 and 450 sqft, the latter was in greater demand and in both cases demand and supply were in sync.But apartments with a built-up size of 600 sqft was more popular than the smaller sizes. It accounted for a healthy 11% demand across cities.
“Government policies such as Housing for All (HFA), Affordable Housing, CLSS and Pradhan MantriAwasYojana (PMAY), have made affordable housing the buzzword in the market. As the largest Property portal in the country, Magicbricks has been tracking the efforts of theMinistry of Housing and Urban Poverty Alleviation infinding solutions to the huge shortfall in affordablehousing and making the Prime Minister’s dream of making Housing for All by 2022 a reality,” said E Jayashree Kurup, Head – Editorial and Advisory, Magicbricks.
“Affordable Housing Policy Perspective 2017uses quarterly supply and demand data on Magicbricks to gain aninsight into what is happening in the housing markets at the ground level. Backed by analysis, viewpoints and interviews with market players and governments, it is an attempt to study the impact of policy on housing stock. Even though it is early days yet, affordable housingseems to enter the formal housing stock and is gettinglisted and transacted through formal channels.We are intransition and affordable housing is expected to dominate the markets for the next five years atleast,” Jayashree added.
Magicbricks graded supply from 1-18 rankingfor the report Affordable Housing Policy Perspective 2017and assessed supply across sizes from300-2950 sq ft. The results were startling.The 300 sqft size was lowest priority formost cities like Noida, Pune, Hyderabad,Gurgaon, Bengaluru and Ahmedabad.The 450 sqft size fared much better.
On the other end of the spectrum wasthe 2200 sqft and above which rankedhigh only in Gurgaon. Sizes 600-1300sqft were the most supplied categories across most cities. However, there are multiple factors that determinethe supply profile. In cities like Faridabadand Ahmedabad, affordability of largersizes like 1000-1200 sqft because oflower per sqft cost determined supplyprofiles. In expensive cities like Delhi,Navi Mumbai and Mumbai, smaller sizeswere in supply.
The supply of smallersizes was missing in Delhi for a longtime. However, redevelopment in lowerincome group colonies such as UttamNagar and Chattarpur have ensured that the supply of these properties hasalso come into the formal market. TheGurgaon market is an aberration wherethe most supplied categories were sizes 1500-1650 sqft, with the 3 BHK topping the chart.
A further analysis of the demand profilesshowed that 600-1000 sqft topped demand in most cities. This was directlylinked to the purchasing power. Gurgaon, for instance, posted maximum demandfor 1000 sqft and the next was 1350 sq ft.This preference for larger units is linked to the purchase capacity of professionalsliving and working in the city.
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