Way forward

  • The conundrum of providing affordable housing requires multi-pronged approach covering both demand and supply side issues.
  • On the demand side, while it is important to provide subsidies, it is equally important to supplement them with infrastructure development and provision of basic services/amenities around these housing projects.
  • On the supply-side, given that affordable housing is a low margin business, policies and measures that enable lower cost will enhance the feasibility of these projects. Other missing pieces like a matured rental market and specifically a robust affordable rental housing scheme will also enable a holistic approach towards affordable housing.
  • Also, as affordable housing is an end-user driven market, the prevailing low property prices and low home loan interest rates could prompt home-buyers to make their purchase decisions.
  • The extension of Real Estate Regulatory Authority (RERA) deadlines for project completions will give the developer community a much-needed breather.
  • Also, as incidence of reverse migration in the country was strong in the wake of the ongoing crisis, it could result in an increased demand for affordable housing in Tier-II and Tier-III cities.
  • On the whole, the affordable housing segment has the potential to recover faster than other residential segments.
  • The target audience of this segment are the LIG / Economically Weaker Sections (EWS) and MIG earners who form a sizeable chunk of India’s total population.
  • If sufficiently incentivised, the affordable housing sector could benefit significantly from the sheer size of its target group.