Tag Archives: Affordable housing in Mumbai

How affordable housing could be a brand statement

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Bottom Line: In the midst of the global housing crisis, however, the prospect of homeownership has gradually slipped further and further away for many low-income families in India, and elsewhere.

Rahul Nahar XRBIA Developers, Affordable housing in Navi Mumbai, Mass housing in Mumbai, Compact housing in Mumbai, Affordable housing case study, How XRBIA could do affordable housing, Real estate news India, India real estate news, Indian property market, Track2Realty, Track2Media ResearchAs our cities fill up with unoccupied luxury houses, our slums too are expanding as people are priced out of the housing market. A quick overview of the statistics reveals the scale of the challenge we face. 10 million of us are choosing to move to cities every year.

There is currently a shortage of 20 million homes. By 2030, 590 million Indians will live in cities, necessitating a further $2.1 trillion of capital investment in infrastructure. The challenge to house the future population is urban in scope and unprecedented in scale.

Unparalleled urbanisation, increased life expectancy and changing living patterns have all contributed to the current shortage of 20 million homes that are needed across India (BBC, 2015). Fortunately, India is not alone in facing this shortage, with housing challenges being replicated across the globe.

If nothing is done to avert this crisis, it is estimated that 889 million of us worldwide will live in slums by 2020 (United Nations, 2003).  While some countries’ strategies have failed to make a dent in the dearth of affordable homes, others have risen to the challenge and could provide valuable lessons for our own efforts.

Considering India, the government’s mission to achieve “Housing for All by 2022” was welcomed across the country following its launch in 2015. The slogan marked a significant shift in the government’s approach to housing policy; finally, those in power started acknowledging that the country is in the midst of an acute housing shortage which could no longer be ignored.

So far, the government has focused on the demand side of the issue. Demonetisation, RERA and GST have all been introduced to increase transparency and accountability in the sector, and reassure homeowners that they can trust real estate developers. At the same time, PMAY- which provides a credit linked subsidy of INR 2.43 lacs to homebuyers purchasing residences below 60 sq. meters. – has significantly reduced the costs of buying a house and expanded the possibilities of homeownership to a greater number of individuals and families.

However, reality has failed to live up to the rhetoric; Under the Pradhan Mantri Awas Yojana (PMAY) that was launched on June 25, 2015, for example, only 19,255 houses were built across all states in the first year. If the government is serious about its commitment to increasing supply of affordable homes, it needs to match rhetoric with resources. The scale of the task at hand is immense, however, and will require radical rethinking of housing policy if this rhetoric is to become a reality.

Living on a low-income in contemporary India means dealing with times pressures, stress and isolation on a daily basis. Taking away a major cause of concern, housing, can alleviate a significant portion of this burden, and can provide families with a secure foundation from which they can build their lives.

For vulnerable people who have never had a place to call home, experience of owing their home which they could afford to buy for the first time can be life-changing. The importance of having a permanent place to call home at the end of each day cannot be underestimated.

What does all this mean for the supply of affordable housing? While larger developers have traditionally focused on the luxury sector of the market, demonetisation has already compelled the big players to look towards providing more affordable housing units catering to end users.

Indeed, recognizing the potential in the affordable housing market, Real estate developers are gradually entering this market space. As supply gradually increases, there is possibility of developers will increasingly compete on buyer’s growing preferences for flexible housing finance and integrated infrastructure.

A developer will only be succeeded in meeting critical housing shortage along with government’s innovative policies if it prevents housing prices from spiralling out of control, and encouraging social cohesion. They must develop a distinct business model in many respect to meet the affordable housing need. Focusing on two core aspects would lead them to establish as a leader in the affordable housing.

First one is they need to focus on the fact that we have a very large segment of the population at the bottom of the pyramid which has no access to housing finances in the form of buying their first home.

A very significant segment not really catered to for various reasons and we think that as time goes it is going to be very important for the industry to be able to address this segment.  One way in which they should be considered as through various finance schemes by developers. Major stumbling-block to them while applying for home finances is lack of proper documents with which bank could land a housing finance.

Developers with financial assistance and strategies to these informal sectors will boost the home ownership among this category thereby allowing them to purchase their apartments and along with it, allows residents to use their social security payments to pay deposits and monthly instalments.

The second goes back to the very core of how we look at the affordable housing business, which is about sustainable urbanisation. Developers must commit on expanding access to homeownership of the buyers and need to understand India’s need for smarter, efficient and sustainable cities which offer a higher quality of life to its people.

Affordable housing developers need to embark on a journey that lays the benchmark for quality and modern urban development in the country. High-quality housing improves resident health, educational attainment and employment prospects. Expenditure on public housing is not a drain on public resources, but an investment that can yield significant returns.

Evidence also suggests that affordable housing can boost the local economy by leaving residents with more disposable income to spend. Therefore, developers should long campaign for increasing collaboration between the public and private sector.

The technology driven developers in all they do from construction & operations, enabling customers to measure, manage and pay for services that they use will sustain in the affordable housing market. Green spaces, community facilities and high-quality security systems are all integral aspects of every affordable housing development.

Developers need to match the global trend of increasing affordability by designing homes that are smart utilization of space and offering standard social infrastructure. the aim should not be to build only mass houses but cities that are environmentally friendly, technologically advanced, committed to education, dedicated to health, and that foster community spirit.

By: Rahul Nahar

CMD, XRBIA Developers

A home for every budget in Mumbai

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Bottom Line: Contrary to the general perception, Mumbai and its extended property market has something for every budget segment. 

Mumbai City, Mumbai property market, Indian real estate news, Indian property market, NRI investment in Mumbai, Track2RealtySugandha Mishra wanted to buy a 2BHK house within a budget of INR 50 lakh in Mumbai. She initially thought she would not be able to afford a roof over the head anywhere in and around India’s financial capital with such a meager budget. However, she was pleasantly surprised when a property agent told her that she could easily get a flat in some of the locations of Navi Mumbai and beyond Thane areas.

“We looked at the areas of Kalyan, Dombivali and Ambernath beyond Thane. We also went on the property hunt to Navi Mumbai locations like Dronagiri, Karjat and New Panvel. Finally we decided for a property in Ulwe where the price point of Rs. 4400 was quite attractive and within our budget for a 850 square feet apartment,” says Sugandha.

Similar is the story of Siddharth Sood, a marketing professional who was told by friends that he could never buy a 2BHK flat in Mumbai with a limited budget of INR 1 crore. However, his property hunt proved such apprehensions wrong and he could settle for a decent flat of 780 square feet at the rate of INR 12,000 in Mulund West.

“I explored areas like Kurla, Ghatkopar East, Vikhroli etc. In Navi Mumbai, locations like Airoli, Vashi and Nerul also looked attractive from the standpoint of my budget limitations. The advantage with the Mulund property is the fact that there are more business establishments and job catchment area within close distance,” says Sood.

Location mantra

  • Some of the locations of Navi Mumbai and beyond Thane areas best bet for up to INR 50 lakh houses
  • Kalyan, Dombivali and Ambernath beyond Thane and Dronagiri, Karjat and New Panvel in Navi Mumbai hot property for INR 50 lakh
  • With a budget of INR 1 crore one can explore areas like Kurla, Ghatkopar East, Vikhroli etc
  • In Navi Mumbai, locations like Airoli, Vashi and Nerul also look attractive from the standpoint of INR 1 crore budget
  • For a budget up to INR 1.5 crore Western Suburb locations like Jogeshwari, Malad, Kandivali or Borivali are quite attractive
  • In Eastern Surburb Kurla or Vikhroli can be an option with the price band of INR 1.5 crore
  • With a budget of INR 2.5 crore and above one can explore most of the locations of Eastern Suburbs, Western Suburbs and some parts of South Mumbai

Options beyond budget constrains 

Namrata Chawla, another homebuyer was on the house hut in Mumbai and with a budget of INR 1.5 crore she did not face as much dilemma with the location as those buyers who have to buy within a range of INR 1 crore. In her case the choice is either to go for a compact 800-900 square feet of apartment in well-connected locations or have luxury of space beyond 1200 square feet in a far-off location.

“I think this is an ideal budget for Mumbai and if you wish to work in any part of the city. Even Western Suburb locations like Jogeshwari, Malad, Kandivali or Borivali are quite within the range if one is looking to work in any part of the Western Suburb. In Eastern Surburb Kurla or Vikhroli can be an option with this price band,” feels Chawla.

However, what a homebuyer like Namrata Chawla just touched upon, issue of an ideal price band, is something that is always INR 2.5 crore and above. With this kind of a budget one can explore most of the locations of Eastern Suburbs, Western Suburbs and some parts of Central Suburbs also.

 “Of course, you can not dream to buy a house in Worli or Bandra with INR 2-3 crore but most of the other locations can be bought. Having said this, I will maintain that in Mumbai the luxury of housing may be costly but a decent roof over the head is always possible with every budget segment. The only catch is that lower the budget and far off extended suburbs is the choice,” explains Raju Natekar, a local property agent.

Market mantra

  • Fierce competition in the mid segment housing but affordable housing to be next demand driver
  • Western suburbs to have more traction due to infrastructure & connectivity to job catchment areas
  • Experts believe the legal and practical checklist remains the same for all budget segment but the location and value addition is the differentiation
  • For a house below INR 1.5 crore, the buyers should check necessities like the size of the bedroom and drawing room than focusing on fancy apartment of modern living
  • Housing needs have to be classified into basic, secondary and tertiary level. Instead of swimming pool and Wi-Fi facility with INR 50 lakhs one should look for location & connectivity with the work place 

Industry perspective 

Mohan Tharwani, Managing Director of Tharwani Infrastructure feels each segment of housing has its own demand drivers in a city like Mumbai. However, the next wave would be in the affordable housing with the government’s focus on Housing for All. Even from the standpoint of short-term market dynamics the market is poised for more uptake in the INR 25-45 lakh category.

“It will take another nine to ten months before the market gets back to the purchase of INR 1 crore and above. Most of these housing transactions are witness to paying 40-50% as down payment and the rest through the bank finance. But since there is no cash available in the market after the demonetization this segment will be muted. In the below INR 50 lakh property market down payment is nominal and the property is by and large purchased with the bank finance only,” Tharwani explains the rationale.

Rajendra Joshi, CEO of SD Corporation feels the location would be the differentiating factor in the choice for property. According to him, the mid segment and affordable properties would be the demand drivers moving forward. Quality developers will definitely be the key differentiating factor.

“The sheer land cost is so high that anything below INR 1 to 1.2 crore is not feasible for any location that has connectivity to the work place. So, this price range is ideally the segment to attract most of the buyers. In terms of the location, today 60% of the work force is living in the Western Suburbs and hence despite of traffic challenges that region will see most of the launches and the absorption. There will be some demand in the Eastern Suburbs as well.  For the affordable buyers below INR 1 crore the markets that look attractive are Thane and Navi Mumbai,” explains Joshi.

In a nutshell, contrary to the general perception that only the Richie Rich can buy a house in Mumbai, the fact of the matter is that there is something for every budget segment. If not the fancy luxe living in posh areas, a roof over the head is always there with the rider of more money adding to more amenities and lesser travelling distances.

By: Ravi Sinha