Myth vs Reality: Is affordable housing really affordable now? Real estate expert decodes

Housing being the basic need of the citizens, Governments across the world have been focussing on the providing low-cost housing schemes . In the wake of Coronavirus and its resultant challenges, both the need for affordable houses and the inclination of the governments are at an all-time high. However, it remains a point of discussion that ‘Are affordable houses really affordable?’. Annuj Goel, Chairman & MD Goel Ganga Developments, shares his knowledge on affordable housing segment and decodes whether affordable housing is really affordable now:-

Busting the Myth 1: Affordable housing is not affordable anymore, Annuj Goel, said, "With the Indian Government’s flagship mission of ‘Housing for All’, the affordable housing sector has remained the focus for many years now. The Government provides a ‘Credit Linked Subsidy’ on loan availed to take home under popular ‘Pradhan Mantri Awas Yojana’ (PMAY). This mass housing programme has sanctioned over 114 lakh houses, with a stupendous outlay of 7.52 lakh crore investment. An investment of this scale and substantial financial help under many categories has indeed made housing affordable for the weaker sections of society."

Explaining Myth 2: Affordable houses are of substandard quality," Goel adds, "The Indian Government is focussing on the affordable housing idea in a long term and sustainable manner. With lakhs of crores already sanctioned, the Government is focussing on good quality projects designed by well-known architects, big contractors, engineering firms along with panels of town planners. A tender is usually issued and after various rounds and scrutiny, the contact is given to design and build the projects if the project is under a housing board. Or else real-estate developers have to build and hand over a certain part of their plot to the housing and development boards (for example - MHADA in Maharashtra). In addition to this, the Government is bringing in the latest housing technologies to make housing units attractive and at par with a normal house. The myths of a substandard output are unfounded."

Talking about Myth 3: Affordable housing drives the property prices down, he explained, "The sites for affordable housing projects are chosen after careful analysis and survey. The needs, demography, connectivity, physical infrastructure, and social amenities are ensured before shortlisting a site. In fact, affordable housing projects have been found to expedite the development of the concerned area. When a large number of housing units are planned in an area, economic activities and demand for services automatically increase in the region. It increases the property prices and Return on Investment (ROI) potential of the properties manifold."

Moreover, talking about Myth 4: Affordable Housing is only for ultra-poor, he added, "The affordable housing schemes rolled out by the Indian Government serve are not limited to only the Economically Weaker Sections of the Society (EWS). The primary aim of the affordable housing schemes is to make the dwellings available at a reasonable price. For the same reason, the Government not only categorises the schemes under the EWS category but also offer houses to Middle Income Groups (MIG) and Higher Income Group (HIG). These are classified on the basis of the income potential of the applicants."

Decoding Myth 5: A difficult and tiresome process is involved, he said, "The rollout of the affordable housing schemes is primarily aimed at the poor and homeless sections of society. However, in many instances, it has been observed that the fraud and undeserving applicants try to grab the low-cost units in fraudulent ways. These instances have led to a verification process where the actual and needy applicants get a fair chance to get affordable houses. Now the process in most stated have been completely been digitalised, right from the application, registration and allotment through an online lottery system. Case example: MHADA and CIDCO’s lottery process  is projected live through youtube and facebook.  It results in a fast and fair manner of units’ allocation to the applicants."

On Myth 6: Affordable houses are not available in metro cities, he said, "The Indian Government is focussing on the providing housing options across Indian cities. Be it a metro city like Delhi, Bangalore, Mumbai, or Chennai or Tier 2 or Tier 3 cities such as Surat, Jodhpur, Agra, Lucknow, Raipur or Palakkad, the affordable housing schemes are everywhere. A holistic approach driven by the idea of providing homes to the needy is behind the conceptualisation and rollout of such schemes. In fact, the Government is focussing more on Tier 2 and Tier 3 cities so that they can turn into the engines of economic growth."

"Affordable housing is still a reality, and the deserving applicants are seamlessly getting affordable housing units under the Government schemes," he concluded.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)