Affordable Housing Projects not affordable.
In the name of Affordable Housing, projects have increased the rates as good as Kandivali and Borivali. The prevailing rates in Kandivali for flat in 10 year old building ranges between 9500/- to 12500/- and for new projects it ranges between Rs.12500 to 13500/- per sq.ft. super built up basis.
A one bedroom kitchen flat in Virar or at Badlapur, Kotshet Thane or Dombivali is built on carpet area of 350 to 450 sq.ft. and costing Rs. 22 Lakh to Rs.46 Lakh. Which means the rate comes to almost Rs.13000/- per sq.ft.
A Badlapur, Virar or Thane flat is selling for a rate of Malad or Borivali? How can it be called affordable or housing for economical weaker section? Affordable houses comes with a rider that you cannot sell it in the open market and every sale must include Builder's Transfer fees. Hence investors, who were looking for a quick buck in Real Estate have stuck. If Malad prelaunch can offer for Rs.9500/- per sq.ft. a flat at far flung suburbs should cost Rs.5000 to 6000 per sq.ft. A flat of 500 sq.ft. should nit cost more than Rs.20 Lakh where the taxation on townships also relaxed.
The recurring cost of these so called affordable flats comes to Rs.3 to 4 per month per sq.ft. which do not include local property tax and NA tax. Which comes to almost Rs.2000 to 4000/ - per month. A same property tax and maintenance cost which Kandivali and Borivali is paying.
Common amenities like swimming pool, Gym, Gardens and Club house adds to the recurring cost of flats. An affordable house can afford a Swimming pool or Air-conditioning of flats 24 hours? or can a membership bill of club house maintenance in a year not adding to the burden of up keeping affordable housing?
Development charges, service tax, VAT, and other incidental charges like society formation, power cable and sewage etc are been charged additionally over and above the margins, which makes affordable house a dream house.
Who is purchasing? Investors for sure. Almost all working couple in Mumbai owns a investment house or NA plot in and around Mumbai. Some of them are lucky enough to get ride of their investment in time and many are facing acute shortage of funds to complete the transaction.
Some of the big name who had launched a massive township at Boisar for Rs.1400/- per sq ft in 2008 is still selling for Rs.1500/- but no takers. The township is now looking a ghost town in the night where not a single light in any of affordable housing flat is on because most of the units are been purchased by investors. Neither it was for population of Boisar not for Mumbai.
Simlarly in Delhi, Amrapali, Greater Noida, Suhana, Expressway and Kosi projects were advertised as affordable housing. Even small and single broker sold 1400 to 1500 flats within two years ie. 2011-13. for Rs.3000/- to Rs.4000/- per sq. ft. but unfortunately the rates are still struggling to be marginalised and huge stock is mounting because of unaffordable price of these affordable housing schemes.
In Ahmedabad, Adani, Godrej, Sports City, Ganesh Housing and many other projects were launched for Rs.2400 to 2900/- per sq.ft. With huge infrastructure development cost on single units, the recurring cost would be higher than the premium housing in the city like Settle light area, Badakdev, Jodhpur, and others. Bopal, Sanand and some part of CG Highway were looking at affordable housing but since last six years neither of the area have given any increament not have shown any sign of recovery becuase the sale price was not according to affordable housing but premium housing. Now when all the margins for appreciation consumed in very first year , how can one expect to have increment? In some of the premium locality of Ahmedabad the rates are ranging between Rs.3000 to Rs.6000 per sq.ft. The same is with new upcoming affordable housing segment can be seen. Hence there is no budget sale.
In Pune, Undri is costing Rs.5000/- to Rs.7000/- per sq.ft. where the main city still offering best deals for Rs.4500/- per sq.ft. Sinhgad, NIBM and south of Pune selling affordable housing with lower amenities for a premium as high as Aundh, Hinjewadi, and Viman Nagar. Chakan and Talegaon are almost 20 kms from Pune are asking for Rs.5000/- per sq.ft. which much above the average premium segment price within the city. To read full article