Reality Check

Affordable housing looks set to gain big from the union budget and may even pull the real estate sector out of its worst slump in almost a decade.

- M.G. Arun

Prannoy Bhatia, 29, who works in the sales department of a mobile telecom brand in Mumbai, has been dreaming of owning a home for the past few years. He finds the 450 sq. ft apartment in Wadala, where he lives with his parents and two younger siblings, too small for him. Moreover, Bhatia plans to get married and has been looking for a two-bedroom flat within Rs 30 lakh. His frantic hunt in the city’s suburbs led to disappointment, though he did hear of affordable projects in places like Palghar, two hours from Mumbai. Demonetisation made it worse, with cash payments, which most developers insist on, becoming difficult. “I don’t want to risk buying a home at the moment,” Bhatia now says, ready to wait another year or so. Though the government’s big push for affordable housing, announced in Budget 2017, lends hope, Bhatia is sticking to advice that he wait until prices fall further.

The real estate sector was one of the worst affected by the demonetisation of high-value notes in November last year. The government argued it was a bid to strike at the root of black money, a malaise running deep in the real estate sector. Nearly 30 per cent of transactions in the Rs 6.5 lakh crore sector (2014 estimate), which constitutes 11 per cent of India’s GDP, were done with unaccounted-for money.