Introduction of the scheme under PMAY (Pradhan Mantri Awas Yojana)—Urban was brought to action for providing dignified and affordable living spaces to low/mid-income masses and urban migrants, which constituted a plethora of industrial workers, migrants working with market associations, hospitality sector, educational and health institutions, long-term tourists, visitors, and students.
Affordable housing already accounts for more than 35 per cent of the housing supply across the top 7 cities in India. In recent years, the affordable housing segment has witnessed a sharp rise in demand owing to numerous government schemes and impressive sectorial growth. The land and housing assets offer long term appreciation which makes them a safer investment option that is bound to yield value gains. The colossal ideation behind PMAY is highly regarded by both the low-income masses and financial investors as lucrative investment opportunities. Before deciding if affordable housing is actually a worthy investment strategy or just a trend, let’s explore some factors responsible for its tremendous growth.
Impact of Government Initiatives
The affordable housing segment was bestowed with remarkable support in the Union budget 2021-22. Some certain extensions were provided like 1.5 Lakh rupees of benefit on interest paid on affordable housing loans by another year till 31st March 2022, which came right after the previous year’s subsidy grant from March 2020 to 2021. The affordable housing projects were also relieved with the extension of the tax holiday. The tax relief measure was introduced to bring more fluency in supply within the segment and keep the demand buoyant in 2021 as well.
Leverage Low cost and high-value asset
Several state governments have capped the sale price per square feet rate that a developer is permitted to charge under the affordable housing segment. Such schemes allow investors and homebuyers to purchase properties at a much lower price compared to other properties falling outside the affordable housing segment and improves the price appreciation scope over a short period.
Impressive high demand and relatively less supply
In the pantheon of misconceptions and stigmas surrounding affordable housing (and there are many – that it only attracts less desirable residents or inherently built of lesser quality and might drag down a neighbourhood), there is the myth that a community with affordable housing may not be an ideal investment for good business. The reality instead is the opposite of perceptions we hold, rather modern affordable housing attracts a wide, diverse range of residents and built quality that matches or sometimes exceeds that of market-rate housing owing to strict guidelines introduced by governments to strictly comply with.
This paradigm shift in ideologies coupled with numerous advantages has led to a sharp rise in demand and making it difficult for developers to cater. The massive amount of uncertainties surrounding real estate projects and ever-increasing prices of properties have opened up opportunities for much safer options with low-cost investments in affordable housing. The high demand is now being backed by developers to shift their focus from premium projects to affordable and mid-range housing segment.
Quick capital appreciation and rent assurance
As previously stressed upon, affordable housing offers homebuyers and investors the opportunity to invest in projects that have a high rate of absorption due to low purchasing costs and high resale value within a short period to offer better relative returns compared to luxury projects. Affordable housing stays rented; most properties have waiting lists and the rent payments are more streamlined. Unlike luxury properties with fluctuating occupancy rates which also lack the steadiness of rentals.
To put an end to your hunt, Wave City is a marvellous example of how meticulous planning and futuristic thinking can be put together to bring simple dreams to reality. Wave City offers you a prime location to own an affordable home with numerous world-class amenities such as a clubhouse, swimming pool, Jio-fibre connectivity, elevators, power backup, large and open green spaces with uncompromised all-round security and surveillance.
To know more about Wave City’s offerings and endeavours, please feel free to get in touch with us.
Share This Story, Choose Your Platform!
Your email address will not be published. Required fields are marked *