Af­ford­able hous­ing a 75,800 crore op­por­tu­nity

To meet the tar­get of two crore af­ford­able hous­ing units by 2022, it is im­per­a­tive that public-pri­vate-part­ner­ships be given an im­pe­tus to achieve the de­sired scale

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The ur­ban af­ford­able hous­ing seg­ment cur­rently presents a $11.8 bil­lion (₹75,800 crore) op­por­tu­nity for the pri­vate sec­tor. At a time when the Cen­tral gov­ern­ment is plac­ing strong em­pha­sis on the Hous­ing for All by 2022 ini­tia­tive, Cush­man and Wake­field ex­pects the strong de­mand pipeline in the top seven cities to drive the pri­vate sec­tor’s par­tic­i­pa­tion in cre­at­ing af­ford­able hous­ing.

In a re­port re­leased in con­junc­tion with CREDAI, at NAT­CON 2015 held in Is­tan­bul, Tur­key, Cush­man & Wake­field pegs the de­mand for af­ford­able hous­ing at 535,400 units across Delhi-NCR, Mum­bai (MMR), Ben­galuru, Chen­nai, Hy­der­abad, Kolkata and Pune. This is based on the de­mand for units in the price range of ₹ 20 to ₹ 50 lakh in these cities, ex­cept for Mum­bai where the range is be­tween ₹ 50 and ₹ 70 lakh. This spells a huge op­por­tu­nity for the pri­vate sec­tor to ex­plore ur­ban af­ford­able hous­ing in In­dia through var­i­ous mod­els, which can be prof­itable for all stake­hold­ers.

“Ur­ban af­ford­able hous­ing has long been ne­glected in In­dia due to var­i­ous rea­sons such as high land prices, de­lays in get­ting ap­provals and low mar­gins in the seg­ment. Now with re­newed fo­cus from gov­ern­ment, we ex­pect this seg­ment to gather mo­men­tum go­ing for­ward,” says San­jay Dutt, ex­ecu- tive man­ag­ing di­rec­tor, South Asia, Cush­man & Wake­field. While over­all new launches rose a tepid 14% in the AprilJune quar­ter, com­pared to the pre­vi­ous quar­ter, de­vel­op­ers launched 7,000 af­ford­able units in the latest quar­ter, an in­crease of 320% on a quar­ter-on-quar­ter ba­sis. Around 60% of the to­tal units were launched in the Na­tional Cap­i­tal Re­gion alone, com­pris­ing Delhi, Gur­gaon, Noida and Farid­abad, dur­ing the sec­ond quar­ter.

“The residential mar­ket can of­fer a mul­ti­tude of op­por­tu­ni­ties if in­no­va­tive hous­ing mod­els that would ad­dress chal­lenges of spe­cific tar­get seg­ments are adopted. The af­ford­able hous­ing seg­ment that is now backed by a strong man­date of the cen­tral gov­ern­ment cur­rently wit­nesses a de­mand-sup­ply mis­match and it is im­per­a­tive that publicpri­vate-part­ner­ships be given an im­pe­tus to achieve de­sired scale,” says Ge­tam­ber Anand, pres­i­dent, CREDAI Na­tional.

To ful­fill the need for low­cost hous­ing, the gov­ern­ment needs to pro­mote pri­vate sec­tor in­volve­ment that would play a sig­nif­i­cant role in bridg­ing the cur­rent deficit of low-cost hous­ing in ur­ban ar­eas. Till now, pri­vate play­ers have shied away from this seg­ment, due to low mar­gins. In­cen­tivis­ing the sec­tor by mak­ing land avail­able, re­duc­ing raw ma­te­rial prices, pro­vid­ing ad­di­tional floor space in­dex (FSI) for such de­vel­op­ments etc are bound to give a thrust to de­vel­op­ment of low cost hous­ing units. Fur­ther, by pro­vid­ing tax ex­emp­tions and thereby re­duc­ing de­vel­op­men­tal costs, the gov­ern­ment would be able to lure pri­vate de­vel­op­ers. Ideally, the public sec­tor should look at ag­gre­gat­ing land for pro­ject, whilst the pri­vate sec­tor should fo­cus on the con­struc­tion, fi­nanc­ing the pro­ject, etc. Ad­di­tion­ally, pri­vate sec­tor par­tic­i­pa­tion, par­tic­u­larly in a public pri­vate part­ner­ship (PPP) model would also en­able timely ap­provals.

The re­port goes onto iden­tify cer­tain residential seg­ments that are un­tapped and present op­por­tu­ni­ties to de­vel­op­ers. It also ex­plores hous­ing mod­els that could be im­ple­mented to ad­dress chal­lenges such as paucity of land at suit­able price lev­els, in­ad­e­quate sup­ply of low­cost hous­ing. Tech­no­log­i­cal in­no­va­tions in con­struc­tion and ad­vance­ments that make homes more ef­fi­cient, yet sus­tain­able at the same time, have also been dis­cussed. Tech­no­log­i­cal ad­vance­ments to en­able pre­fab­ri­ca­tion method of con­struc­tion, de­vel­op­ment of smart homes, pas­sive houses etc have been pre­sented in the re­port, out­lin­ing the op­por­tu­ni­ties and chal­lenges while im­ple­ment­ing them. It also stresses on the need for de­vel­op­ers to en­gage in spe­cialised hous­ing mod­els such as stu­dent hous­ing, se­nior liv­ing, cater­ing to spe­cific de­mo­graph­ics to en­sure bet­ter ef­fi­cien­cies for de­vel­op­ers.

IMAGESBAZAAR

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