How can Affordable Housing Propel the Growth of Real Estate?

Real Estate- An Industry That Is Never Constant

The real estate market is never seen as a constant. There are fluctuations that take place and it is always in chaos. No proper regulatory to watch over is what affect the realty sector the most. Not only this, the imbalance between the supply and demand of inventories/ properties is all that adds to the variations in the industry.

What propels the growth of real estate? 

Affordable housing has always acted as the rescuer in the hard times for the real estate industry. Houses being a basic need for the population, the segment of affordable houses have fulfilled many to realize their dream to own a home. People with small investment can afford these pocket friendly abodes.

Government has also joined hand for fostering growth in Real Estate

RERA Introduction

After the introduction of RERA i.e Real Estate (Regulation and Development) Act, the Indian real estate sector has undergone a transformation and more security for the buyers. In the coming future, it will be visible that affordable housing has helped in turning the tables toward the sector. It tends to protect home-buyers as well as help boost investments in the real estate industry

Pradhan Mantri Awas Yojana (PMAY)

Government’s initiative to boost the affordable housing launched the scheme PMAY. Under the scheme, urban poor will be given affordable houses and aims to build 20 million affordable houses by March 2022.

                         

Affordable Houses Have Less Margin  

In India, the population has the majority of middle class who are striving to have a home in their name. Thus, the demand for in this sector is more wherein the supply is limited and with only few developers. The margin in luxury segment is higher than the proportion of margin in affordable segment is about 10%-15%.

Why Real Estate growth is fostered by affordable housing?

·    This is a basic understanding that majority of buyers in this particular segment are not investors rather they are end-users. Thus, there stand chances of much less price fluctuations as they are not bought for investment purposes.  

·    Another reason, affordable housing cost at least 30% less than the other projects in the same location. It also attracts the buyer and foster growth.

·    Smaller sizes are always more in demand than the large flat sizes. Thus, making it more marketable.

·    More secure and attractive because of the direct intervention of government.

The affordable housing has driven the growth of real estate sector and in the near future we will witness that the major reason for upward trend in real estate industry is largely driven by affordable housing. Thus, more supply should be focused to fulfill the demand of buyers.