When Smart Value Homes — a 100% subsidiary of Tata Housing that focusses on affordable housing— launched its project in November, the company had to opt for “lucky draw” as the number of buyers was much more than the supply. It made one thing very clear: affordable housing was thriving.
Affordable housing refers to an apartment or a house that someone from a low-income and mid-income group can afford, with prices varying from one city to another. In Mumbai and the NCR and other metros these houses are priced anywhere around R20-50 lakh.
The Tata houses are sold between R6 lakh and to R8 lakh in the outskirts of Mumbai.
According to industry experts, the trend is likely to continue in 2011 and the segment will see the least price movements in 2011.
Affordable housing was coming up only in the peripheries of cities and not where it was actually needed, experts said. “The affordable variety is not happening where it is needed the most — in the central regions of cities like Mumbai where properties are overpriced. Nevertheless, this is causing newer locations to be developed in suburbs, so the residential market is expanding,” said Anuj Puri, chairman, Jones Lang LaSalle India, a real estate consultant.
Developers, on the other hand, say affordable housing is almost impossible in some areas since land is very expensive in those places. “How do you expect us to start a affordable housing in central Mumbai or other similar locations when the government itself is selling land at such steep prices?, a Mumbai-based developer counters.
International real estate consultant Cushman & Wakefield said in a recent report that though Mumbai is likely to to witness a correction in real estate prices in 2011, affordable housing will remain the least affected.
“We had launched our first affordable value housing project in Boisar in June this year and managed to successfully sell more than 80% of the 300 units that were on offer for the project’s first phase in record time,” said Uday Dharmadhikari, CEO, Usha Breco Realty.
Although buyers, especially the ones in the lower income group, have been complaining about the availability of loans for the lower-income housing. However, according to experts, the situation is improving. “Loans for both the construction of affordable projects and the purchase of units therein is now available due to proactive policies by the government,” said Puri.