New Delhi: These days, affordable housing has become a crucial instrument in India's inclusive development agenda, and is adding a new chapter to the country's real estate story. The growth in affordable housing is attributed mainly to the large population base, the large proportion of middle and lower income population and the increasing number of nuclear families.
Developers of the country's affordable housing sector face significant challenges due to several economic, regulatory and urban issues. The lack of availability of urban land, the rising threshold costs of construction and regulatory issues are supply-side constraints that affect the ability low-income groups to buy housing in the organised sector.
Despite many constraints, there are many developers such as Value and Budget Housing Corporation (VBHC), Provident Housing, DLF, Brigade Group and Prestige Group which are active in this segment in Bangalore. As a result, many end-users have realised their dream of home ownership. The absorption rate is high for affordable housing projects compared to the other segments of housing like mid-end, upper-mid end and luxury.
Due to the entry of branded developers in this segment, the faith of buyers has been restored. Nevertheless, demand in this segment is still more than the existing supply. The projects that have witnessed good sales in Bangalore include DLF Maiden Heights, VBHC, Prestige Tranquility, Brigade Omega, Provident Sunworth and Provident Welworth City.
The prices of affordable projects range between Rs. 2500-3000/sq.ft. At present, the city has around 30 such projects offering 16,296 units. The typical buyers for this segment of housing are the working population employed by the IT sector in junior-mid level positions, government servants, people working in small-medium scale industries at mid-junior level positions, and people working educational institutions.
Bangalore continues to hold immense potential for further development of affordable housing projects as it has huge demand, especially from the low-mid level income groups. The city will continue to see more affordable housing projects in the locations such as Hosur, Road, Doddaballapur Road, Off KR Puram Road, Kanakapura Road (after NICE Road) and Tumkur Road due to availability land at relatively cheaper prices.
(Srinivasa Reddy is Associate Director - Research & Real Estate Intelligence Services at JLL India)
