The term ‘affordable ‘ is a relative concept . It varies from person to person, and is based as much on perception as on purchasing power.
Ideally, from a realtor’s perspective, ‘affordable’ could mean a home costing around Rs 8 lakhs. Now, to build a house at this cost, including registration and deposit expenses, a developer would need land at low rates.
The cost of floor area ratio and construction should not exceed around Rs 1,200 per sqft for a 600 sqft flat. This is possible only when the state government gets into development after acquiring land.
The private sector will find it difficult to match this as the cost of land will be high in the open market in core city areas. However, the private sector can match these rates provided the project is some distance away from the city. Also, today, the taxes come to between 30 and 40 per cent of the total cost of a project. Some subsidies for such projects will help in catering to the needs of this market.
Need for housing
There is an estimated shortage of around 25 million houses in urban centres. A significant part of this market will be the affordable homes category. Typically, this segment will cater to those having a household income of around Rs 20,000 a month.
The middle income group may find ways to acquire a home loan to finance their dream home but this may not always be entertained since the low income group also need housing and who may not be able to apply for a loan.
Along with the tax benefit and one per cent interest subvention, a home at Rs 8 lakhs is affordable. In a growing city like Bangalore , the rental values will keep increasing as development gains ground.
It means a yearly escalation in rental expenses with no matching incremental growth in the household income. It is therefore necessary to own a house. It is a basic necessity today in a country where the large population will keep the demand for housing high and therefore the costs of renting one escalating.
Market trends
There is an estimated shortage of around 25 million houses in urban centres. A significant part of this market will be the affordable homes category. Typically, this segment will cater to those having a household income of around Rs 20,000 a month.
Along with the tax benefit and one per cent interest subvention, a home at Rs 8 lakhs is affordable. In a growing city like Bangalore , the rental values will keep increasing as development gains ground.
It means a yearly escalation in rental expenses with no matching incremental growth in the household income. It is therefore necessary to own a house. It is a basic necessity today in a country where the large population will keep the demand for housing high and therefore the costs of renting one escalating.
Benefits
There is an estimated shortage of around 25 million houses in urban centres. A significant part of this market will be the affordable homes category. Typically, this segment will cater to those having a household income of around Rs 20,000 a month.
Along with the tax benefit and one per cent interest subvention, a home at Rs 8 lakhs is affordable. In a growing city like Bangalore , the rental values will keep increasing as development gains ground.
It means a yearly escalation in rental expenses with no matching incremental growth in the household income. It is therefore necessary to own a house. It is a basic necessity today in a country where the large population will keep the demand for housing high and therefore the costs of renting one escalating.