Challenges that Affordable Housing Sector is facing

The affordable housing segment received a big impetus with the Prime Minister announcing the ambitious ‘Housing for All by 2022′ initiative. Subsequently, the segment was accorded infrastructure status enabling real estate developers’ easier access to finance. Cash incentives in the form of Credit Linked Subsidy Scheme (CLSS) to homebuyers in this segment are yet another milestone for the segment. But notwithstanding all these positive steps the segment is not without challenges.

The market is presently run by end-users with limited investor activity. Amid such a scenario, there is a visible flight towards more affordable projects. These projects in the upcoming urban corridors (which are generally located in proximity to business parks) are witnessing massive spurt in demand by homebuyers. But, most of the affordable houses are being developed in the outskirts, which makes it difficult and time taking for the people to commute.

Pradeep Aggarwal, Co-Founder & Chairman, Signature Global and Chairman- ASSOCHAM National Council on Real Estate, Housing and Urban Development, said, “Affordable housing segment is going through several challenges that are there for other real estate segments also. There are some challenges that act as hindrances are reaching the target of ‘Housing for All by 2022’. First, the land is not available at the desired locations that are in demand by the people buying these houses. We have to understand that the people buying the affordable segment would like to have their homes in places that are accessible and not far from their offices. Adding on, the rising cost makes it difficult to come up with homes that can fit the budgets of affordable segment.

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