With the developer community making efforts to fit their projects into the "affordable housing" category, the average sizes of apartments promoted by the them have shrunk in all major cities in the country over the last five years.
In percentage terms, the maximum drop can be seen in Bengaluru (21%) where the average apartment area has reduced from 1,750 sqft to 1,375 sqft. Pune recorded a 19% fall, NCR 17%, Mumbai Metropolitan Rrea (MMR) 17% and Chennai 15%, says a report by Anarock Property Consultants.
In order to realize its mission of housing for all by 2022, the Union government has gone the extra mile to make things happen. Still, the developer community is nowhere near fulfilling the affordable housing demand in the country as most of them are not catering to the needy, says the study. "Unfortunately, what we have seen so far is more marketing hype than genuinely affordable housing," said Anarock chairman Anuj Puri.
The term affordable is being misused by most developers to show that they align with the ‘housing for all’ mission, he said. Going by the ministry of housing and urban poverty alleviation’s definition, dwelling units between 300 sqft and 500 sqft valued at less than Rs 5 lakh are affordable for the economically weaker sections. The numbers change for the low income group (LIG) and middle income group (MIG). RBI’s norms to qualify for incentives meant for affordable housing say the dwelling unit should not cost more than Rs 45 lakh in metros and not more than Rs 30 lakh in non-metros. Out of 22,120 dwelling units launched in the second quarter of 2018 in the top seven cities, only 46% qualified for the affordable housing segment, he said. Of them, 6,530 units were priced at less than Rs 20 lakh per unit and the remaining were between Rs 20 lakh and Rs 40 lakh, he said. Between the first and second quarter this year, there was a 100% increase in supply in the affordable housing segment, said Puri.
Affordability in any category depends on the location, builder’s brand value and property specifications, but size is the primary criterion. Compact home has become the new mantra for affordability in pricey cities and locations, he said.
Puri advocates promotion of rental accommodation for those who cannot afford to buy own apartments. "This is quite a challenge, considering that the Indian real estate market now favours end-users and remains unattractive for investors," he said. What is required is exempting affordable housing from GST altogether to attract more investors, he said.