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Affordable housing gets a boost after demonetisation

The real estate sector appeared to be in doldrums after the government's historic decision to undertake demonetisation. But the move appears to have infused a fresh lease of life in the country's budget housing segment.

Affordable housing gets a boost after demonetisation

Moneycontrol Bureau

The real estate sector appeared to be in doldrums after the government's historic decision to undertake demonetisation. But the move appears to have infused a fresh lease of life in the country's budget housing segment.

Data from Liases Foras reveals that the number of housing projects in the price bracket of Rs 25-50 lakh has seen a spike of close to 29 percent over last year, according to a report in the Hindu BusinessLine.

The report says that amid the two types of residential property, luxury housing and budget housing, the market for the latter has been less impacted from the note ban.

In fact, both consumers and developers want to park their money in smaller ticket size projects - the affordable housing segment is seen as a safe bet post the cash ban and there has been a steady increase in the number of projects in this segment.

Liases Foras chief Pankaj Kapoor says that new launches are predominantly more in the affordable and mid-priced segment and this proves that developers are already proceeding in the right direction.

A PropEquity report also noted that 2016 has seen an absorption of 57,962 units in the Rs 10-25 lakh bracket.

According to Samir Jasuja, Founder of real estate analytics firm PropEquity, developers on their part don't want to risk their penny by putting in big size projects, and thus, sit on unsold inventory.

Infrastructure status to affordable housing

Finance Minister Arun Jaitley in the Union Budget 2017 gave affordable housing segment the infrastructure status thus giving boost to the housing sentiment.

Infrastructure status would allow the segment to obtain funding at a cheaper cost.

A Collier study forecasts that ready to move in properties or projects close to completion shall witness an increased demand in 2017.

Previously, the government had also announced an interest subsidy to the tune of three-four per cent for first time affordable housing home-buyers in 2017.

Developers on their part are also increasing their pie of the affordable category. Developers like Tata, Mahindra, Purvankara and Xrbia are increasing their push in the category.

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