Affordable housing launches in Noida and Greater Noida have dipped in the first half of this year as compared to the corresponding period in the previous year. Coming as it does in the backdrop of the central government’s mandate to offer housing for all by 2022, the fall in the launches in the region in H1 2016, compared to those in H1 2015 was by 44%.
According to real estate pundits, affordable housing in the region is expected to get further affected by increasing land rates in the region as well.
In its latest study, real estate services company Cushman & Wakefield noted that the fall in affordable housing launches in Noida and Greater Noida as a contrast to the trends in the rest of the country where affordable housing is on the rise.
The total number of units launched in last one year in NCR which can be categorised as affordable was 3,000. Of the launches in Sohna region, 2,100 units will be available in next three to five years. Only 900 launches in the affordable ticket range is slated along the Noida Expressway and Noida Extension. The average ticket size or entry level price per unit of flat for new launches in the affordable segment was recorded at Rs 31,00,000/- while it was Rs 37,00,000/- in H1 2015, demonstrating a drop of about 16% in ticket size in NCR.
However, overall, the countrywide trend towards affordable housing is positive, the report stated. Affordable housing units launched in H1 2016 in the top eight cites were recorded at over 17,000 units. The highest supply of affordable housing was recorded in Pune at 4,170 units followed closely by Bangalore at 4,155.
Mumbai saw the highest number of total launches in H1 2016 with over 12,000 units being added to the residential stock across all categories, followed closely by Bangalore with approximately 11,000 units of new residential units launched in H1 2016. Chennai saw the least number of unit launches in the first half of 2016 owing to a slowdown in construction activities.
Anshul Jain, managing director, India, Cushman & Wakefield, told TOI that the outlook remained positive for affordable housing trends. “Going forward, we expect to see more affordable housing projects to come up, given the cost benefit in creating these units. The time taken from ground-breaking to completion is lower than that for the mid- or high-end apartments,” Jain said.
“Also sales can happen a lot faster, thus helping developers realise their costs earlier than usual. Further, with the government defining the affordable space as 30 square metres in tier 1 and 60 sqm in tier 2 and announcement of benefits for development of such apartments, we expect this segment of residential housing to grow,” Jain said.
When contacted, a top official of the Confederation of Real Estate Developers’ Associations of India (Credai) pointed out that the cost of land was the biggest component (40%) of an entire real estate project, be it residential or commercial. Amit Modi, director, ABA Corp and vice-president of Credai (Western UP), told TOI, “With a hike in land cost, prospects of affordable and low-cost housing have been on the decline and will fall further. Noida has been suffering from an inventory overhang because of multiple reasons and stagnant prices had kept investors away for a long time.”
“The recent hike in residential land allotment rates in Noida has also affected the market adversely at a time when the Noida market has already been reeling under immense pressure with unsold inventory in the region,” Modi said.
Source : http://realty.economictimes.indiatimes.com