This is great news for the real estate fraternity. The market is truly reviving and prospective home are just waiting to seal the right deal. However, there are concerns about whether affordable homes will still be in vogue. But according to real estate experts affordable homes are here to stay, at least for the next couple of years.
This trend of building affordable homes will continue for at least two-three years. The builders have realizes the actual needs of buyers and want to cater to them. The projects will happen mostly in the outskirts but they will surely come up. It should be noted that the business model for affordable homes is different from that of luxury apartments. In the former, the builders make money from high turnover while in the latter it is from higher margins.
Affordability in Mumbai:
There is a tremendous demand for affordable housing in Mumbai at least 90 percent of total demand comes from middle class segment. The growing middle class population in the city will fuel this demand for years to come. Affordable housing is set to do very well in Mumbai. It will bring back the real estate sector to its glory days. As of now, builders only face competition from MHADA when it comes to affordable housing. In Mumbai, two types of affordable housing projects are expected to flourish. Something in the range of Rs 20 – 40 lakh is considered really affordable for a city like Mumbai.
Location and Flat size:
Though affordability housing is normally associated with suburbs and extended suburbs, some builders have a different opinion. While flats in large townships in far-flung suburbs constitute one part of affordable housing, one should look at other options too. A 300 – 350 sq ft 1BHK or a 500 sq ft 2BHK could be affordable for some in Mumbai city. So, people should look at constructing more compact homes. But the majority of builders feel that affordable homes are possible only the suburbs as land prices are cheaper.
Financial institutions have started supporting affordable housing projects, which is good news for the industry. Secondly, as investors, have more or less moved out of this market, the demand is from the service class population. People would couldn’t afford to buy homes in the inflation are looking forward to affordable homes. This is encouraging builders to develop these projects. Experts feel that that the government could play a more proactive role to support this trend by reducing stamp duty, which is five percent ass of now. They could also help builders by introducing low cost technology, providing easy finance and real estate know how.
Whenever one talks of affordable housing in Mumbai one of the first areas that come to our mind is the belt from distant Northern Suburbs. A hit with the booming migrant population, these areas are now attracting people from downtown Mumbai. Rapid infrastructure development, great connectivity and exciting lifestyle options are making these upwardly mobile for the young working population. Here’s a look at what makes these areas hot:
1) The Mira-Bhayendar road has improved considerably with road dividers in place. This has eased traffic problems in that belt
2) The skywalk at Mira Road station is operational. Similar skywalks are in the pipeline for Northern Suburbs.
3) MMRDA has approved the link road plans for this belt. Under this scheme, there will be a link road from Borivli to Virar and one from Sopara to Virar. The latter will be 120 – 180 ft road the work for which is underway.
4) There are regular trains from Borivli to Virar and trains will soon starts plying on the extra four tacks from Borivali to Virar.
5) MMRDA is pumping in a lot of money into these areas and development is expected to happen at a rapid rate.
Power and water supply:
1) Northern suburbs has regular power supply. Water supply is limited to two hours twice a day for these suburbs but it’s regular. All buildings get sufficient water and people don’t have to rely on tankers.
2) HDIL is setting up a power plant in Chandansar, Northern Suburbs. MMRDA is also financing the Surya Dam pipeline development in Northern suburbs.
3) Mahanagar Gas pipeline has opened its services in the Northern suburbs.