Although affordable housing sounds like a simple term, let’s find out what it really means. It simply means affordable housing facility for the middle-income and lower-income households. You will come across affordable housing projects in developing countries where it is important to have such schemes to empower the population which has been side-lined. As you can imagine, we need such a scheme in a still-developing country like India. Even though you might come across different definitions for affordable housing in different countries, the basic concept is same everywhere.
As we can see, the intent is very clear when it comes to projects like these – to give better living condition to families who are below the average household income. In a developing country like India, affordable housing is regarded as the need of the hour. A large percentage of the Indian population is still living in less than desirable living conditions. We have to look at it as a basic human rights issue. Every citizen must have the basic amenities like water, food, sanitation and house. Top world organizations like United Nations and the World Bank insist that developing countries should make sure that their citizens get all the basic amenities as it is their basic human rights.
Affordable Housing in India
The Government of India has ambitious plans when it comes to affordable housing in India. The Government of India has revealed their plan where they want every Indian to have home to live in by 2022. To make this a reality, the Government has been taking lot of initiatives. There is a huge demand for affordable housing in the country as we speak. For the same, the Government is planning to collaborate with private builders to form a public-private partnership model. It’s no secret that high real estate prices have made it difficult to buy a house. Lot of Indians can only dream of a house at the moment due to this. But with the introduction of affordable housing, lot of Indians can now dream about a house of their own.
Affordable housing in the international scenario
By far, we have seen the scenario in India. Now let’s see the scenario in the rest of the world. The United Nations and the World Bank have jointly recommended something named The Median Multiple Indicator. This is an indicator of housing affordability. We have already mentioned that different countries have different mechanism to gauge affordable housing. But in principle, it means the same everywhere.
Changing the landscape of Indian Real Estate
Residential real estate is on the rise in India. The market is booming. Investors from all over the world are eager to invest in the Indian real estate industry considering the growth rate and future it holds. Buyers are enjoying the new opportunities created by the Indian real estate industry. Investing in real estate has been proven beneficial for all the investors. One can always expect further prospects when it comes to real estate business. And now affordable housing in the country is making the right noise. People who have migrated to big cities find it hard to own a house. And they are in dire need for affordable housing. They need an inexpensive place to live and affordable housing intends to fulfil this need.
Both established developers as well as first time developers benefit big time when they invest in affordable housing. It’s an opportunity to mark the industry with the skills you possess in investment. If you have the right tactics in planning, you will be able to make huge profit. Builders stand to benefit if they employ the right tactics. If we take a look at it from buyer’s perspective, we can see that they are looking for a place which is affordable but at the same time filled up with all the necessary amenities. As a result, buyers are really impressed with the affordable housing options available.
Buyers are in not in a mood for luxury housing
The preferences and priorities of the investors don’t remain the same. These days, they are more into affordable property with all the basic facilities. This scenario occurs when a large percentage of the population migrates to the tier-1 and tier-2 cities all over the country. It’s a growing trend that people are relocating to cities looking for greener pastures. As a result, demand for affordable housing has increased exponentially. Back in the day, only certain class looked for houses to buy. That is not the case anymore. Middle class is looking for an affordable housing option to invest their hard earned money. Affordable housing allows them to find a house which is near to their work place, within their budget. Evidently, luxury housing has taken a backseat. It is a global trend as we speak. Buyers are no longer interested in spending huge sums of money on luxury housing. Buyers have become much smarter and they are actively pursuing affordable housing. The demand for reasonably priced housing has hit the roof.
Affordability has been one of the driving forces of various trends in the real estate segment. As we all know, the trend of nuclear families is rising all over the country. And affordable housing fits the bill perfectly. Nuclear families drive the growth of affordable housing. Now we know where the demand comes from. Moreover, IT sector has been a big player in this regard. In cities like Bangalore, Pune, Hyderabad, Chennai and Thiruvanathapuram, IT has become the major force driving the local economy in these cities. And that has fuelled the need for affordable housing. Techies are looking for affordable apartments closer to their office. This allows them to cope up with the dynamic working hours of this sector. As a young professional, it is a big deal to own a house in a metropolitan city in India.
Real estate in India has been evolving constantly. It has become a new business altogether over the years. New regulations are in place at regular intervals and different methods are being employed in the development process. Investors are lapping up residential property as it is the most attractive investment option for them. Developers are looking for innovative methods to attract the buyers. It is indeed a profitable long term venture for the investors. And at the same time, the developers stand to gain big time considering the ceaseless boom in the sector.
First time buyers find it more affordable
Considering the rapid urbanization, real estate has opened the floodgates of several opportunities for every sector. In India, things are looking really positive all thanks to the reforms introduced by the Central Government. The RERA Act is one such example. The RERA Act has been one of the biggest reforms that have boosted the real estate segment like nothing else. The pro-buyer attitude of the RERA Act has been highly appreciated by the investors. And it is expected to drive the growth rate beyond expectation. Indian real estate had witnessed a downfall prior to this. But the industry has become more responsible and organized with the latest reforms. All thanks to the vision introduced by the Central Government for the growth of real estate in India, the industry is enjoying a very good phase at the moment.
When it comes to developers, they have realized the potential of affordable housing in the cities. The demand is huge and it is growing every day. Considering that, builders are more than eager to invest in the real estate India sector. Buyers who were sceptical about the performance of the real estate industry are finally warming up to the industry. They are all looking for more profit. Builders are planning out projects that cater to the current demands of buyers. And they understand the significance of timely response. No wonder why we see an influx of affordable housing projects which are tailor made for investors. When it comes to most cities, we see hoardings with the caption, “property for sale”. And that speaks volumes about the significance of property investment. When it comes to the best residential projects, affordability is the key reason behind the success. People are not looking for premium villas or premium residential properties. Let’s take the example of Bangalore –buying a property in Bangalore has become increasingly difficult. You will find plenty of property websites in Bangalore. If you do a Google search on “residential property in Bangalore” or “real estate Bangalore”, you will come across lot of real estate websites. There are plenty of high-end properties in Bangalore. But given the fact that the growing population of techies in the city is looking for affordable housing, builders are doing everything they can to offer affordable housing. Even at that, property prices are comparatively high in Bangalore.
The projects in metropolitan regions
Let’s take a closer look at the projects in metropolitan regions. Builders consider the trends in the industry before they plan a project. Lot of people are migrating to big cities for work. And they are looking for a residence. When they first move to the city, they prefer to stay in rented apartments. But after building a profile in the city, they are looking for housing option they can invest in. And they always look for an affordable housing option instead of a luxury housing option. So, those builders who have affordable housing stand to benefit from this trend. Also, according to studies, this migration process is going to get stronger in coming decades. Within few decades, large percentage of the population will be living in the cities. And that tells a lot about the significance of affordable housing in the metropolitan regions. If you act quickly enough, you might benefit from the trend which is going to be here for a long time.
Being smart is very important
Developers can drive their profits if they are smart enough. If they have a vision for the road ahead, they will be walking away with huge profits. For that, you need to understand the need of the buyers. You also need to understand the future that awaits the industry. The rapid urbanization is here to stay. No one can put a stop there. Builders have to build better infrastructure keeping the future in mind. Also, they must ensure that there are no loopholes in the upcoming projects. Affordability is a big concern for first time buyers. So, being too pricey might backfire. All that you need is a smart strategy that will bring returns in the long term. There is no dearth for investors in India. And their number is about to grow in a big way in the coming years. Poverty is being eradicated and more people are coming into the bracket of middle class. And middle class drives the growth of affordable housing. Being there at the right time with the right offer means success. As long as builders act smartly, they will stand to gain big time from this trend. Real estate in India is going through a transnational phase. Affordable housing is the key to that. If you understand it, then you will foresee big success.