Description
This is a report about affordable housing, real estate industry evolution, demand supply dynamics, Opportunities for affordable housing in India, Issues relating to Affordable Housing.
AFFORDABLE HOUSING Market Scenario in India
Presented by:
Mr. Ashish Jindal Regional Director (North) Knight Frank India Pvt. Ltd
Introduction to Affordable Housing
• Housing for the masses • Comfortable living
• Location proximity
• Affordability is quantified by • Household income
• Price of the product
• Affordability does not compromise on • Quality of construction
• Provisioning of socio – economic infrastructure
• Recent shift in focus towards affordable housing
Growth Scenario of Indian Economy
• GDP growth surpassing target rates
• Decline in population below poverty line
Real Estate Industry Evolution
15 YEARS AGO Unorganized sector Controlled development by development authority Traditional construction techniques Funding through unorganized sector Loan approval – quarterly execution Property purchase at fag end of career NOW Organized sector Private sector participation Modern Mechanized construction Techniques Multiple funding Options Loan processing in a matter of days Property owners’ age – 27 and above
Demand Supply Dynamics
• Short Supply of residential dwellings
• Supply shortfall existing since post independence • In 2005 estimated demand is 209.5 million, supply is 189.7 Million • Demand – Supply gap is narrowing
Demand Supply Dynamics – cont’d
• Low supply of housing for low income earners • As per 11th 5 year plan
- Shortage of 24.71 million dwellings - Close to 99 % of shortage in EWS & LIG segment
Category EWS LIG MIG + HIG Total
Housing shortage (Mn) 21.78 2.89 0.04 24.71
Supply way away from Reality- Bangalore
Price Related Income take home (Lakhs) 10-12 18-21 21-25 45-50 60-70 80-90
Price < 50 lk 50-80 lk 80 lk - 1 cr 1 cr -2 cr 2cr - 3cr > 3 cr
Supply Split 28% 29% 4% 29% 2% 8%
Income Level Per Capita (Targeted)
Rs. 5,50,000
This wide gap is seen existing across most urban cities in India
WIDE GAP
Rs. 79,460
Actual Per Capita Income
Reversal of growth factors
THEN NOW
Continuous increase in GDP Increase in income levels
2003
Decline in GDP growth rate
2007 & beyond
Lowering of home loan interest rates Affordable property prices High market sentiments
Income level stagnation/ risk of layoffs High lending rate Unaffordable property prices Low market sentiments
Opportunities for Affordable Housing in India
• Restructuring of the housing sector • Re-focusing product to real end user demand • Catering to strong domestic demand • Real estate as a widely linked sector • linkages with 200 industries
• Multiplier effect on growth •
Growing urban population
• Projected urban population to 533 million by 2025
Issues relating to Affordable Housing
• Lack of regulatory mechanism •High cost of land • Stringent land acquisition process • Double taxation system – high transaction cost • Constraining density norms
Suggestions
• • • • • • • • Speedy approvals of housing projects Provisioning of additional FSI Improving connectivity to suburbs Rationalization of transaction cost Non scarcity of developed land Creation of Special Residential Zones (SRZ) Value engineering in construction Private Public Participation (PPP model)
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doc_646114260.pdf
This is a report about affordable housing, real estate industry evolution, demand supply dynamics, Opportunities for affordable housing in India, Issues relating to Affordable Housing.
AFFORDABLE HOUSING Market Scenario in India
Presented by:
Mr. Ashish Jindal Regional Director (North) Knight Frank India Pvt. Ltd
Introduction to Affordable Housing
• Housing for the masses • Comfortable living
• Location proximity
• Affordability is quantified by • Household income
• Price of the product
• Affordability does not compromise on • Quality of construction
• Provisioning of socio – economic infrastructure
• Recent shift in focus towards affordable housing
Growth Scenario of Indian Economy
• GDP growth surpassing target rates
• Decline in population below poverty line
Real Estate Industry Evolution
15 YEARS AGO Unorganized sector Controlled development by development authority Traditional construction techniques Funding through unorganized sector Loan approval – quarterly execution Property purchase at fag end of career NOW Organized sector Private sector participation Modern Mechanized construction Techniques Multiple funding Options Loan processing in a matter of days Property owners’ age – 27 and above
Demand Supply Dynamics
• Short Supply of residential dwellings
• Supply shortfall existing since post independence • In 2005 estimated demand is 209.5 million, supply is 189.7 Million • Demand – Supply gap is narrowing
Demand Supply Dynamics – cont’d
• Low supply of housing for low income earners • As per 11th 5 year plan
- Shortage of 24.71 million dwellings - Close to 99 % of shortage in EWS & LIG segment
Category EWS LIG MIG + HIG Total
Housing shortage (Mn) 21.78 2.89 0.04 24.71
Supply way away from Reality- Bangalore
Price Related Income take home (Lakhs) 10-12 18-21 21-25 45-50 60-70 80-90
Price < 50 lk 50-80 lk 80 lk - 1 cr 1 cr -2 cr 2cr - 3cr > 3 cr
Supply Split 28% 29% 4% 29% 2% 8%
Income Level Per Capita (Targeted)
Rs. 5,50,000
This wide gap is seen existing across most urban cities in India
WIDE GAP
Rs. 79,460
Actual Per Capita Income
Reversal of growth factors
THEN NOW
Continuous increase in GDP Increase in income levels
2003
Decline in GDP growth rate
2007 & beyond
Lowering of home loan interest rates Affordable property prices High market sentiments
Income level stagnation/ risk of layoffs High lending rate Unaffordable property prices Low market sentiments
Opportunities for Affordable Housing in India
• Restructuring of the housing sector • Re-focusing product to real end user demand • Catering to strong domestic demand • Real estate as a widely linked sector • linkages with 200 industries
• Multiplier effect on growth •
Growing urban population
• Projected urban population to 533 million by 2025
Issues relating to Affordable Housing
• Lack of regulatory mechanism •High cost of land • Stringent land acquisition process • Double taxation system – high transaction cost • Constraining density norms
Suggestions
• • • • • • • • Speedy approvals of housing projects Provisioning of additional FSI Improving connectivity to suburbs Rationalization of transaction cost Non scarcity of developed land Creation of Special Residential Zones (SRZ) Value engineering in construction Private Public Participation (PPP model)
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doc_646114260.pdf