An Affordable House

Housing for all, tax concessions to buyers and developers is changing the housing landscape with affordable homes getting into the driver’s seat, by Preeti Kulkarni

- Preeti Kulkarni

The average Indian’s biggest dream is to own a house and they would go through any extent to achieve it. Over the past two years, real estate builders, developers, and specialised lenders in the housing space have created an ecosystem which has resulted in this dream coming true for scores of Indians. However, increasing consumerism and rapid economic growth in the 2000s resulted in the size of homes getting bigger and bigger leading to affordability taking a backseat.

The slowdown in the real estate sector post the 2008 financial crisis is yet to fully settle and there are several instances of stalled projects from that period. Realising the mismatch between the need of the larger mass and the available inventory, the government announced the Housing for All by 2022 in June 2015. Ever since then the affordable housing segment is literally the talk of the town, with billboards hailing the virtues of upcoming residential projects splashed across cities.

Defining affordable housing

“We define affordable housing as units that are affordable by that section of the society whose income is below the median household income,” says Harshil Mehta, JMD and CEO, DHFL. However, affordability is a vague term and changes its meaning depending on who the buyer is. To make some meaningful headway, three factors were arrived at to define affordable housing—the size of the residential unit, the income level of the home buyer, and the price base on demand. This definition is mostly for buyers to benefit from the tax concessions allowed on loans under the affordable housing scheme. However, the overall rub off of affordable housing is being seen in the manner in which project sizes are getting realistic.