With sizeable demand for quality affordable housing within the Mumbai Metropolitan Region (MMR), the growth potential for this segment seems promising, says Prabhat Ranjan, Chairman and MD of Olympeo Infra Ltd. In an exclusive interview with Housing.com News, Ranjan maintains that the number of large and reputed developers foraying into affordable housing developments, will provide a big impetus to the growth of this segment.
Q: What constitutes an affordable home in the Mumbai Metropolitan Region (MMR) and what are the key features of such homes?
A: In the MMR, we cannot have uniform parameters, to define affordable homes. Having said that, considering the price and size, an affordable home is one that is costs between Rs 50 lakhs and Rs 75 lakhs within Mumbai city and the developed suburbs, while in the extended suburb, homes between Rs 20 lakhs and Rs 40 lakhs can be considered as affordable homes.
In most cases, these affordable housing projects comprise large developments, with lots of amenities and small unit sizes. The small sizes of the homes, ensure that the cost of the flats fit into the budget of a large population of self-employed people and those working in the informal sectors. These projects also tend to have tie-ups with housing finance companies that extend loans to these segments of the population.
Q: Are affordable homes more attractive than other segments in the MMR?
A: In the current economic environment, real estate demand is primarily driven by end-users.
Most of the real estate projects being developed within Mumbai city and its suburbs, are out of the reach of more than 75 per cent of the MMR population. Earlier, very few affordable housing projects were being developed, on account of low margins and the risk associated with development and financing. However, affordable housing development is now the brightest spot in the real estate sector, as it serves the actual need of a large section of the population.
Q: How would you describe the availability of affordable homes in the MMR? Is there a supply constraint?
A: Land prices play a very important role in the final selling price of the homes. Within Mumbai city and its suburbs, the land prices are very high. This makes the housing projects developed in these areas unaffordable, to a large section of the population.
Most of the supply of affordable homes, hence, is in the extended MMR, along the suburban rail network. However, the lack of adequate physical and social infrastructure in these locations, is limiting the supply of quality affordable housing projects. Moreover, the affordable housing sector also faces the same sets of problems, vis-à-vis approvals and high taxes that the real estate sector is grappling with.
Q: Which are the hotspots for buying affordable homes in the MMR?
A: In the extended western suburbs, Boisar, Palghar and Naigaon are the hotspots for affordable housing, while along the central line Kalyan, Titwala, Vasind and Shahpur, have ample supply in the affordable housing segment. In addition, the Karjat-Neral area, Panvel and the NAINA region along the Mumbai-Pune belt, are emerging as affordable housing destinations. These regions have a distinct advantage of local train connectivity with Mumbai city.
The fact that CBDs are also shifting away from the city centre to the suburbs, has helped to reduce the travel time to work and hence, makes these areas more accessible from work places.
Q: What are the five key advantages of buying an affordable home, in the MMR?
A: Affordable homes are offering a lot of advantages in the present environment:
- The base price being low, it has high potential for appreciation.
- This segment is eligible for home loan subsidy under the Pradhan Mantri Awas Yojana (PMAY) scheme.
- To attract home buyers in the outskirts, these projects include a number of amenities and facilities and hence, offer a better quality of life.
- These projects also offer a number of attractive financing schemes, thereby, easing the cost of ownership.
- Affordable housing projects are generally located in the upcoming locations, which have huge development potential.
| “Sustained growth of affordable housing destinations, will depend on improving rail and road connectivity to such locations. The policy makers need to ensure that to decongest the city, economic/growth centres should be developed along the outskirts of the city.” Prabhat Ranjan, Chairman and MD, Olympeo Infra Ltd. |
