In the present real estate market scenario, affordable housing has emerged as the crucial instrument of India’s comprehensive development schema, and has been tallying a new chapter in the nation’s real estate scenario. The surge in affordable housing is linked mainly with the huge population base - the rising proportion of the lower and middle-income strata and the surging demand of nuclear families.
The concept of affordable housing revolves around three concepts, income level, floor area, and the price of the unit. To make it easy to calculate whether a property falls under affordable tag or not, the World Bank has come up with an equation where you divide the median price of the house by the yearly media of household income. Depending on the result of this equation, from the scale of 3 to 4 the property is considered affordable. While this equation is what the world follows, the general factor that India follows is that any unit that falls under the 5 to 15 Lac category offering all the basic amenities will be considered an affordable unit. While affordable housing is an extremely prospective segment, the developers of nation’s affordable housing market face significant challenges because of various regulatory, economic, and urban issues. Lack of urban land’s availability, the increasing regulatory issues and construction threshold costs are some of the supply-side constraints, which tend to influence the ability of low-income property buyers to buy houses in an organized sector.
In spite of so many constraints, a number of developers like Provident Housing, Value and Budget Housing Corporation, DLF, Prestige Group, and Brigade Group, have created a strong name in this segment in the IT City, Bangalore. Because of which, a number of end-users have been able to realize the dream of owning a home. Absorption rate for the affordable housing projects are much higher as compared to various other housing segments like the upper end, mid end, and luxury segments.
Following the plan to develop Bangalore as a manufacturing hub besides being the IT giant, a number of mid income employees of the manufacturing industry are ready to settle their base here. This added to the government’s various provisions like funds and recognition have and continues to make affordable apartments for sale in Bangalore an instant hit with fastest absorption rate.
The cost of affordable projects in Bangalore varies between 2500 to 3000 Rs. PSF. Presently, here are approximately around 30 projects following this segment that offers 16,296 units. Majority of buyers going for this housing segment are the employed population of IT sector working on junior to mid-level posts, government sector, people engaged in small and medium scale industry at various mid to junior level, and finally the majority working in city’s educational institutions.
It is because of the entry of renowned developers in this sector like TATA, DLF etc. the sentiment of city’s buyers has remained positive. Nonetheless the demand for this segment has remained higher than the present supply. The projects, which continues to witness excellent sales in Bangalore comprises of VBHC,DLF Maiden Heights, Brigade Omega, Prestige Tranquility, Provident Sunworth, and Provident Welworth City.
The city continues to grasp immense potential for the development of affordable houses at the back of the huge demand, specifically from the majority of low-mid income group of buyers. The city is expected to continue to see a rise in affordable housing projects in localities like Doddaballapur Road, Kanakapura Road, Hosur Road, Off KR Puram Road, and Tumkur Road because of the availability of land at comparatively cheap prices here.
Tripti writes for 99acres.com, with articles focused on real estate industry. Being an avid reader and a keen observer, she keeps herself informed about the new realty developments in real time. You can reach her on G+ and/or LinkedIn