Affordable housing set for growth in 2017

The maximum demand for housing in India has always been and continues to be in the affordable segment where property prices range from Rs 15 lakh to Rs 50-60 lakh, while a huge number of ready-to-move projects in cities like Gurgaon , Mumbai are priced upwards of Rs 1 crore.

Affordable housing schemes for the middle and lower income groups are finally on a serious growth curve in 2017, with huge demand in both segments now also being met with increasing supply. It may seem strange that massive demand and massive unsold residential inventory can coexist, but this is in fact the result of pricing mismatch. The maximum demand for housing in India has always been and continues to be in the affordable segment where property prices range from Rs 15 lakhs to Rs 50-60 lakhs, while a huge number of ready-to-move projects in cities like Mumbai are priced upwards of Rs 1 crore.

Affordable Housing Projects Gurgaon

This is evidently a stalemate situation for the existing supply – having invested heavily in location and premium features and amenities, the developers of these projects can obviously not bring the prices of their inventory down into the affordable brackets. These are premium offerings and will retain premium prices, with only marginal downward price revisions possible in some projects if the developer in question is able to absorb a loss. Others will wait for market conditions to improve, which they are already showing signs of doing.

The good news for the affordable housing segment lies in the Indian Government’s determined policy directive to provide Housing for All by 2022. While this objective seemed a little fabulous to begin with, we are actually seeing some serious action on the ground as a result of this policy directive.

The Government is now collaborating with private builders and developers under a public-private partnership model (PPP) to make Housing for All by 2022 a reality. Many developers have responded positively, which is not surprising. It is no secret that affordable housing promises a lot of growth for all concerned – the problem lay in the fact that the profit margins in this segment are quite small, and the Government had not provided developers with a good incentive rationale to take the plunge.
affordable housing scheme Sohna
Today, they have this incentive. The Government has provided 39% higher allocations for affordable housing development vis-a-vis FY 2016-17 under the Pradhan Mantri Awas Yojana (PMAY). It has also extended the Credit Linked Subsidy scheme to loans of value up to Rs 1.2 million. And, while the Government has also made a number of other moves to meet the demand with supply and address the affordability issues for the middle and lower income groups, the most important stimulus by far has been the fact that affordable housing has now been granted infrastructure status. This translates into easy financial credit for builders and makes it a lucrative segment for them to invest in.

The Investment Information & Credit Rating Agency (ICRA), considered to be the most reliable domestic rating agency, confirmed in a recent report that the affordable housing segment in India is set to grow at a faster pace than the rest of the real estate industry – at more than 30% over the medium term – and will be the key growth driver for the Indian mortgage finance market.

Other Factors Driving Affordable Housing

Massive urban inward migration: While luxury housing continues to hold its own in terms of its niche demand, the fact is that developers today are more inclined towards creating affordable housing projects. Not only is such housing selling like hot cakes, it is also the most incentivized segment for both developers and end-users. A large percentage of the population is migrating to the tier-1 and tier-2 cities, attracted by the new job opportunities ushered in by the country’s growing economy. As a result, the demand for affordable housing has increased exponentially. Simultaneously, Government policies like RERA have infused fresh buyer confidence into the real estate sector, bringing fence-sitting buyers onto the market with firm purchase decisions for homes that meet their budgets.

An increasingly attractive investment proposition : On the back of the new regulations which the Government has deployed to make Indian real estate a more credible and logic-driven market, property investors focusing heavily on affordable housing for the middle and lower income groups, as this is by far the most attractive investment option now. Affordable housing is now a highly profitable long-term proposition for real estate investors, and developers also stand to seriously profit from creating it.

Affordable housing supply in the right cities : The trend of nuclear families driven by young professionals is increasing all over the country, especially the metropolitan cities where InfoTech and other major corporate sectors hold sway. In cities like Bangalore, Pune, Hyderabad, Chennai, Thiruvananthapuram, Navi Mumbai, Gurgaon, Noida and New Delhi, young professionals are eager to own homes and settle down with their new families, so affordable housing is a major hit in such cities.

Indeed, it has never been a better time for affordable housing in India. The segment has lost its ‘down market’ label and become a serious and respectable business sector for real estate developers. It is a given that the demand-supply gap is still huge, but the fact is that it is narrowing visibly for the very first time in several decades. Over the next five years until 2022, we will see affordable housing action on the ground unfolding at an increasingly rapid pace – and everyone, not least of all the country’s economy and most importantly the long-neglected end-user of affordable housing, stands to benefit.

Haryana Govt. affordable housing scheme Gurgaon

Source : Ashwinder Raj Singh, ANAROCK Property Consultants | Mumbai | July 11, 2017 12:37 IST

FAQs on Affordable Housing Projects Eligibility

FAQs on Affordable Housing Projects Eligibility

Please note that all Questions listed here are only meant for Affordable Housing Projects which fall under Haryana Affordable Housing Policy 2013 by DTCP.

Q. Who is Eligible?

  • All Income Groups
  • First Preference to one who has not been allotted any flat / plot in any HUDA developed colony / sector or any licensed colony in any of the Urban Areas in Haryana, UT of Chandigarh and NCT Delhi.
  • An applicant can make only one application

Q. Are NRIs (Non Resident Indian) & PIO (People of Indian Origin) eligible to apply for Haryana Affordable Housing projects?

Yes, NRIs & PIO are eligible to apply in such projects.

Q. Will any successful applicant in any affordable housing project be eligible for future projects by HUDA or DTCP, Govt of Haryana?

The eligibility for any future project will depend on the prevailing policies of the government at that time.

Q. If an applicant surrenders his unit, will he be eligible to apply for other affordable projects?

No, the applicant will not be allowed as he had been already allotted the property by the government but he chose to surrender it. The preference will be given to other applicants.

Q. If an applicant has lost his acknowledgement, will he be issued a duplicate copy?

No, he won’t be issued a duplicate copy, though he can request the developer to share his application number.

Q. Can an applicant submit 2 applications in the same project under same name?

No, an applicant can only submit one application in one project. Though he is entitled to apply in as many projects he wishes to.

Q. Is it possible to withdraw application before the draw?

No, the applicant can not be withdraw his application before the draw.

Q. If an applicant has lost his acknowledgement, will he be issued a duplicate copy?

No, he won’t be issued a duplicate copy, though he can request the developer to share his application number.

Q. Can an applicant submit 2 applications in the same project under same name?

No, an applicant can only submit one application in one project. Though he is entitled to apply in as many projects he wishes to.

Q. Is it possible to withdraw application before the draw?

No, the applicant can not be withdraw his application before the draw.

FAQs on Draw of Apartments

Q. What is date of draw of XXX project?

The date of draw is not pre-decided. Usually, it takes place after 3 months from the last date of application to the project.

Q. Does the applicant need to carry his acknowledgement at the venue of Draw?

Yes, the applicant needs to carry his copy of acknowledgement to the venue as it is the official receipt of application.

Q. What is the level of transparency of Draw?

The Draw is completely transparent as it is conducted openly in presence of all applicants and certain high ranking state govt officials. The applicant can also take part in the entire process of draw. The entire event is video-graphed for transparency.

Q. Will the draw be conducted collectively for all categories or separate for each category of apartment?

The draw will be separate for each category. The categories can’t be merged at the time of draw.

Q. If the draw does not take place in stipulated 90 days from last date of application, are the applicants eligible for any interest?

Yes, the applicant is eligible for 10% interest on his booking amount for the duration exceeding 90 days.

Q. How will the applicant come to know the result of the draw if he is unable to attend the event?

The result of the draw will be published in the same newspapers in which the project was advertised for applications. The successful allottees will be informed personally by the developer via email and postal letters.

Q. In case of success in two draws, will the applicant be given a choice to retain both the flats?

No, The applicant has to choose any one apartment and surrender the other.

Q. How many applicants will be in the waiting list?

The developer will maintain a waiting list of 25% of the applicants for 4 years. If a wait-listed applicant wishes to withdraw from the list, he can withdraw and his booking amount will be refunded.

Q. Is there any finance facility available for Affordable Housing projects?

Yes, Finance facility is being provided by all Nationalized banks as well as NBFCs. In certain projects, even the booking amount is being financed.

Q. How will a non-working woman make payment or apply for loan if she is successful in draw?

The payment can be transferred from husband’s account and the husband can apply for Home Loan and can be made co-applicant for the property.

Q. What are the different modes of payment which are to be made against the property to the developer?

The payment can be made by Cheque/Demand Draft/Banker’s Cheque/NEFT/RTGS. Cash payment is not accepted by the developer.

Q. What is the time frame given to deposit the next installment of 20% for a successful allottee?

A period of 15 days from the date of allotment is given to the allotte to make the next payment.

Q. If the developer does not refund the booking amount after the draw is over, who should the customer approach?

The DTCP is the nodal authority and the customer can approach DTCP for all concerns regarding affordable housing projects.

Q. How will the developer refund the booking amount of the applicants who are unsuccessful in draw?

The unsuccessful applicants get the booking amount through cheque which is either delivered to their correspondence address via registered post or can be collected from the developer office after furnishing all valid documents.

Q. If a successful allottee fails to make payments in stipulated time, will he be given a grace period?

Depending on the developer, a grace period can be given. If the applicant still fails to make the payment, his allotment stands cancelled.

Q. What is the assurance that the developer will deliver the project in stipulated 4 years of time frame?

5% of the security deposit out of 15% will be released by the govt only after developer gets occupation certificate, remaining 10% will be released only after 5 years from possession as the developer has to maintain the project for 5 years. Any delay by the developer will eventually result in his financial loss as the margins are wafer thin on such projects.

Q. If the developer does not deliver the project in 4 years, what action will the Government take on behalf of Customers?

The developer stands to lose his security deposit of 15% of the project and cancellation of his license. Also, he gets blacklisted for future.

Q. Who will take care of maintenance after 5 years?

An RWA will be formed after 5 years and it will take care of entire maintenance of the project.

Q. Will Power Back up be provided?

No, there is no provision of Power Back up in affordable housing projects.

Q. Is there any provision of car parking in Affordable Housing projects?

Though it is mandatory for the developer to provide ONE free two-wheeler parking with each unit, the peripheral or open area in the project can be used for car parking. The said area cant be sold or leased to any occupant. It is free and open to all.

Q. What will be the quality of construction in such affordable housing projects?

The entire construction of the project will be monitored by DTCP and the developer is mandated to use predefined materials which are approved by the government. Therefore, the quality of construction will be superior.

Q. When can a successful allottee sell his apartment?

A person who has been allotted a flat under affordable housing policy can sell his flat only after 5 years from the date of his allotment, else there is a penalty of 200% of flat cost on the seller and his allotment will be cancelled.

Q. Can an applicant withdraw after 2 or 3 years of allotment?

Yes, the applicant can withdraw from the project. Only Rs 25000/- will be deducted from the amount he has paid to the developer and the rest will be refunded and the said apartment will be offered to the wait listed applicants.

Q. When will the construction of the project commence?

The construction will start after getting all statutory clearances from various departments.

Q. Is HUDA (Haryana Urban Development Authority) authorized body for Affordable Housing projects?

No, All affordable housing projects fall under the privy of Department of Town & Country Planning (DTCP), Govt of Haryana. HUDA is a govt agency which falls under DTCP.

Q. How are Affordable housing apartments different from EWS flats which are also allotted by the govt?

  • EWS flats are below 300 Sq.Ft. area and are meant for Lower income group people, whereas Affordable apartments have carpet area between 350 – 750 Sq.Ft.
  • EWS apartments are located on fringe areas of the city whereas affordable housing projects are coming up across good locations.
  • EWS apartments are basic apartments with no facilities whereas Affordable housing projects have common facilities like 50% Green Area, Community Hall, Creche, Swimming Pool, Sports facilities.
  • EWS apartments are Low Rise whereas Affordable housing projects are High Rise apartments with elevators.

For upcoming Affordable project you may visit http://www.affordablehousingprojectsgurgaon.com