With affordable housing set to drive the Indian real estate market for the next decade, the maximum supply and demand is currently being driven by the 900-1200 sqft segment. The 300-600 sqft apartments which also attract credit linked subsidies for those with a salary level of upto Rs.6 lakh is expected to soon be transacted in the formal market, revealed thelatest report – Affordable Housing Policy Perspective 2017 – by India’s No.1 property site Magicbricks.
Affordable Housing Policy Perspective 2017 is an earnest effort by Magicbricks that puts the focus on affordable housing and its multiple facets. The report also gives a deep insight to consumers on what affordable housing is all about, policy changes, informal renting, taxation on vacant property and the benefits of Pradhan Mantri Awaas Yojana (PMAY).
Affordable Housing Policy Perspective 2017 revealed that for the first time there is a sync between demand and supply. This has been due to the slow demand movement and rising levels of completed stocks entering the market. Demand has now rationalized and supply in the market is now in various stages of completion.
Affordable Housing Policy Perspective 2017 also highlighted that the major chunk of supply and demand currently was in the 900-1200 sqft property that would classify as MIG 1 and 2 under the government categorization for CLSS benefits. This segment has accounted for more than 40% of the demand in urban India in the January-March 2017 quarter. The sizes of 1350-1500 also accounted for about 14% of demand.
The report also stated that between the 300 and 450 sq ft, the latter was in greater demand and in both cases demand and supply were in sync. But apartments with a built-up size of 600 sq ft was more popular than the smaller sizes. It accounted for a healthy 11% demand across cities.
“Government policies such as Housing for All (HFA), Affordable Housing, CLSS and Pradhan Mantri Awas Yojana (PMAY), have made affordable housing the buzzword in the market. As the largest Property portal in the country, Magicbricks has been tracking the efforts of the Ministry of Housing and Urban Poverty Alleviation in finding solutions to the huge shortfall in affordable housing and making the Prime Minister’s dream of making Housing for All by 2022 a reality,” said E Jayashree Kurup, Head – Editorial and Advisory, Magicbricks.
“Affordable Housing Policy Perspective 2017 uses quarterly supply and demand data on Magicbricks to gain an insight into what is happening in the housing markets at the ground level. Backed by analysis, viewpoints and interviews with market players and governments, it is an attempt to study the impact of policy on housing stock. Even though it is early days yet, affordable housing seems to enter the formal housing stock and is getting listed and transacted through formal channels. We are in transition and affordable housing is expected to dominate the markets for the next five years at least,” Jayashree added.
Magicbricks graded supply from 1-18 ranking for the report Affordable Housing Policy Perspective 2017 and assessed supply across sizes from 300-2950 sq ft. The results were startling. The 300 sq ft size was lowest priority for most cities like Noida, Pune, Hyderabad, Gurgaon, Bengaluru and Ahmedabad. The 450 sq ft size fared much better.
On the other end of the spectrum was the 2200 sq ft and above which ranked high only in Gurgaon. Sizes 600-1300 sq ft were the most supplied categories across most cities. However, there are multiple factors that determine the supply profile. In cities like Faridabad and Ahmedabad, affordability of larger sizes like 1000-1200 sq ft because of lower per sqft cost determined supply profiles. In expensive cities like Delhi, Navi Mumbai and Mumbai, smaller sizes were in supply.
The supply of smaller sizes was missing in Delhi for a long time. However, redevelopment in lower income group colonies such as Uttam Nagar and Chattarpur have ensured that the supply of these properties has also come into the formal market. The Gurgaon market is an aberration where the most supplied categories were sizes 1500-1650 sq ft, with the 3 BHK topping the chart.
A further analysis of the demand profiles showed that 600-1000 sq ft topped demand in most cities. This was directly linked to the purchasing power. Gurgaon, for instance, posted maximum demand for 1000 sq ft and the next was 1350 sq ft. This preference for larger units is linked to the purchase capacity of professionals living and working in the city.