CommonFloor Survey: Consumers demand more benefits for Affordable Housing

With the announcement of the Union Budget for 2015-16 round the corner, there are high expectations from the real estate sector with regards to the initiatives that the government would take. commonfloor conducted a survey among consumers across the country to know their expectations from the Union Budget in relation to the real estate sector. Special benefits for Affordable Housing was topmost in the wish list of a whopping 50 per cent of respondents. Other initiatives like Industry status for the real estate sector (25 per cent), Single window clearance (12.5 per cent) and Encouragement to build sustainable homes (12.5 per cent) were also part of their wish-list.

Need for Affordable Housing

The need for affordable housing has never been felt more than now. The burgeoning rise in population has meant that the residential requirements has increased considerably compared to a decade back. With a majority of the population comprising the “middle-class” or “middle-income” category, buying a house of their own is a dream that most of them harbour. The BJP government had in its agenda for the Lok Sabha elections proposed the objective of “Housing for All by 2022”. It is in this context that the relevance of affordable housing gains immense prominence.

Govt incentives in 2014-15 Union Budget

The government had provided many incentives in the Union Budget 2014-15 to promote affordable housing. This included setting up of a Mission on low cost affordable housing to be anchored by the National Housing Bank (NHB). It was also proposed that an allocation of Rs 4,000 crore would be set aside for the NHB so as to increase the flow of cheaper credit for affordable housing. This credit was to be made available to the urban poor, economically weaker sections (EWS) and low income groups (LIG). To further encourage the concept of affordable housing, the government had also proposed that residential projects that commit at least 30 per cent of the total project cost towards affordable housing would be exempted from the constraints of minimum built up area and capitalisation requirements, with the condition of a three-year lock-in period.

Impact on Real Estate

In this backdrop, it is expected that the government would come out with further incentives in the Union Budget 2015-16 to make affordable housing more available and attainable. This is expected to provide a tremendous boost to the real estate sector in terms of cheaper credit based on affordability, and for the more deserving, more developers opting for affordable residential projects due to the various incentives provided, and more buyers opting for affordable housing so as to fulfill their long-unfulfilled dream of owning a house, thereby pushing demand for affordable houses many notches higher.