Realty Check | Day 1 | Dr Sunit Sachar: Much demand for Affordable Housing

06 Aug,2014

By Dr Sunit Sachar
Senior VP-Marketing & CRM, Parsvnath Developers Ltd 

 

The Realty Sector is one of the biggest contributors to the GDP of the country. It was approximately 10.6% in 2011 which has come down to 6.5% in 2013 and is now in the slab up to 5.4% due to the dwindling sale and development experienced. The Real Estate sector enjoys the qualification of being the second largest employer in the industrial sector following IT and is instrumental in influencing over 4000 industries directly or indirectly.

 

The major concern that has influenced the sector was the instability of the political scenario (the situation now has been changed) which had influenced the economic scene of the country to a great extent. With the coming of the stable government at the Centre and the government having constructive plans which have already been announced, the possibility of a brighter future is on the anvil. The government, which is the biggest spender of money, has shown interest in developing of the basic infrastructure facilities and urbanization in the country which is bound to influence the growth in the economy as well as contribute towards better sentiments in the market place which shall result in overall good. With recent government policies for the benefit of the middle class, the home loans, the announcement of Rs 37,880 crore for NHAI to undertake 8500 km of highway in addition to Rs 3000 crore for road to the NE Region, Rs 700 crore to be allocated for 100 Smart Cities, Rs 11,600 crore to be planned for harbour projects, with 16 new ports to come up, the liberalization of FDI policy, streamlining of land use, motivating bureaucracy and steps towards reforms are all constructive policies which will help improve government planning thereby resulting in better circulation of monie which in turn shall contribute towards the demand of goods and services leading to industrial growth and employment generation etc. All this will not only boost public sentiments but also the Real Estate sector which will contribute healthily to the coffers of exchequer enabling the government to go in for spending on infrastructure and development of urbanization.

 

In a recent survey conducted amongst 3400 home buyers/investors (68% end-users and 32% investors ) conducted by Realty Plus–99 acres.com, it has been found that barring 15% people, all are buoyant about the future and 75% people said definite ‘yes’ when asked about thinking of purchasing a home in the near future. However, it is interesting to note that 51% people preferred Ready to Move in property, 26% under construction property and 23% are looking at newly launched property.

 

Although there is a great expectation of the reduction in bank loan interest rates, 40% people would like to wait for it to happen, the other section is ready to take a plunge forward if they are influenced with the builder’s track record or when they get the option of ready to move in or near-completion hopes.

 

It was observed that 73% people preferred property of Rs 50 lakh and 40% of out of that between Rs 25 to Rs 50 lakh. Thus, it is clear that there is a tremendous demand for Affordable Housing. In fact, a great amount of stress is being laid on this housing segment by the Government.

 

It was seen that 70% of the people preferred to purchase the houses in major Metros and NCR, greater importance is given to location, connectivity, facilities around, builders brand equity apart from project specifications and ticket size of the Units. Amongst residential properties, 75% of the Buyers like to go in for Group Housing/Independent Floors,15% Independent Houses / Villas, 5% for High-end property and 5% for Serviced Apartments.

 

Twenty-six percent people feel that there will be no change in prices while 28% are expected to go down by 10% while 46% of the people expect that there will be price increase of minimum 10%. The industry has experienced unsold inventory, subdued transactions, uncertain political environment, economic slowdown, non-rise of income levels, increased construction cost, slow pace of construction, and preference for low value property and domination of actual users.

 

Coordinated by Shobhana Nair

 

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