Urbanization of Delhi NCR and Affordable Houses

As per 2011 census, the urban population in India is increasing at a rate of 2.8% per year. The increasing concentration of people in urban areas has led to the problems of land shortage, housing shortfall, congested transit and has also severely stressed the existing basic amenities such as water, power and open spaces of the towns and cities. Haphazard urbanization has forced people in Middle Income Group to live in slums for years. Housing companies were mostly involved in luxurious housing for better premiums and profits and government was providing affordable housing for only economically weaker sections of the society till now.

But recently, the scenario is changing. With the advent of innovative ideas and newer technology, developers are changing the definition of affordable housing in Gurgaon. “Affordable” is a relative concept with several implications in different income groups. Whereas, previously it was associated with economically weaker sections in want of roof and security. Today, it’s a whole new segment in the real estate industry catering to needs of several income groups. With the government providing subsidies for Middle-Income Groups, the dream of a home for the fence-sitters is becoming a reality.

Also, in a step to fulfill the Prime Minister’s vision to provide “Housing for All” by 2022 the private players are now becoming active to provide residential houses in Gurgaon for office goers in Delhi NCR. The people who were paying heavy rents in Delhi NCR can opt for a house which is affordable according to their pocket with a convenient EMI.

Affordable Housing – a key growth driver in realty sector of Delhi NCR can be broadly defined on four parameters:

The minimum volume of the habitation: As architecture is moving vertically due to increasing in population density and shortage of land. Instead of area standard, affordable housing takes in purview volume standard and how to minimize it with expertise in architecture.

Provision of basic amenities: Provision of basic amenities such as sanitation, adequate water supply, and power to the dwelling unit is crucial while defining affordable housing. Maybe, the housing society doesn’t have a swimming pool or a gym but it is mandatory for the society to be accessible from a different part of the city especially if we talk about flats in Gurgaon. Delhi NCR being a cosmopolitan area calls for easy access and prime addresses. Also, provision of community spaces and amenities such as parks, schools, and healthcare facilities, either within the project or in the neighborhood, are desirable depending on the size and location of the housing project.

The cost of the house: While accessing the cost of a house it is always important to consider the buying cost as well as the maintenance cost. Affordable housing in India has become more desirable after the advent of Real Estate Act as it makes first five years of possession maintenance free. A thought should also be given to the kind of vehicle which is necessary for the accessibility. If the society is too remote higher transportation cost will lead to migration again.

Location of the House: Entailing from the points already made above residential projects in Delhi NCR should be well connected to the workplaces, marketplaces and fun centers. The lower land cost may provide cheaper housing possibilities but if housing and transportation costs burn a hole in the pocket of the resident, the possibility to regulate slums and residential colonies to decongest the national capital won’t be possible.

Affordable houses in Gurgaon can change the way people looked at townships and residential projects towards a cumulative growth of Delhi NCR. This is a systematic approach which will not only ease the tight realty markets but will also curb the problem of congestion by decentralizing things. The Middle-Income Groups who were forced to compete with each other for renting scarce homes in the national capital can have an affordable nest of their own.

Tips to Navigate the Real Estate Sector Post-Demonetization

What seemed like a hibernation of at least five years, the real estate sector gradually seems to be finding attention among home buyers again. In a recent survey conducted online, it was found that more than 60% of the respondents are likely to buy a property in the next one year period. In the wake of the rate cuts by the RBI, 16% of the respondent said that they will buy a real estate. This optimism is more pronounced in Hyderabad, Pune, and Mumbai whereas cities like Bengaluru and Delhi NCR were lagging behind. In these cities, high inventories & prices have not yet uplifted the dampened spirits. It is likely that the real estate prices are likely to increase, and the returns from investments may lack consistency. In such a scenario, caution displayed would be the ideal move.

Although real estate has continued to be a substantial investment in India, buyers have been aware of the financial crunch especially after demonetization, which has led to mounting inventories and unfinished projects. In some cases, delays have ranged anywhere between 5-6 years. This trend has caused buyers to choose ready-to-move-in properties rather than the under-construction projects and pre-launch offers. Even with the Real Estate Regulation Act 2016, buyers do not feel confident that the act guarantees the buyers’ interests. So what does one do in a market like this? Experts have the following suggestions:

Experts believe that it is best to research well regarding real estate properties, a basic rent vs. buy analysis should help one decide what step to take. For instance, it is not within everyone’s capacity to spend extravagant EMIs such as INR 80,000 for a premium luxury project but the same can be afforded for a cheaper rent. Likewise, even in cities where buying a property would cost more, there are renting options such as those available under affordable housing in Gurgaon and NCR.

One should also consider the cost of settling down with a property, which significantly reduces the chances of upgrading to other cities, and lucrative job opportunities. Especially true for young people who are still building their careers, it is advisable to not become tied down because of mortgage. That said, experts do point that in cities like Hyderabad and Pune, it is still possible to buy properties, where the EMIs are roughly equivalent to the rent being paid – not a bad choice to create assets for the loan borrower.

Respondents have also claimed that the biggest hurdle for them when buying a property is the high interest rate on home loans and reduced tax benefits. It seems that along with this reason, there are other factors that potential buyers are considering, one being their estimation of their income increase. Some other reasons include rate cuts on home loans ranging between 2% – 12.8%, decline in property prices between 10% - 57.2%, and more payment options afforded by the builders.

Respondents also believe that they would prefer to go for loan options where they can seek the maximum loan which is available to them, which ranges anywhere between 70% - 80% of the property value. This suggests that although there are buyer sentiments which incline toward buying properties, the environment plays an important role in the decision-making.

Experts suggest that for such buyers, consolidating the available finances would help them understand how much they can afford to pay off as the down payment. After all, the bigger the down payment amount, the lower the EMI that would greatly stabilize the monthly budget.  However, they caution that buyers not to look into savings which are meant for education, retirement, or marriage. More importantly, experts advise that maintaining a good credit score will help lenders and banks to consider the best option available for the home loan. This includes keeping expenses low and not revolving credit card dues. 

Even though the real estate sector is lifting itself up out of the slump, the trick to survive and own a dream house is to be careful and research well. The wait will pay itself off.

Signature Global is a reputed name in the real estate sector in India dealing in affordable housing projects. Signature Global’s residential flats in Gurgaon include their massive projects of Solera (Sector 107), Synera (Sector 81, NH8) Andour Heights (Sector 71), Orchard Avenue (Sector 93), Grand Iva (Sector 103), Roselia (Sector 95A), and Serenas (Sector 36). At present, Signature Global’s Signum project offers retail shops in Gurugram in sector 36, 95A, 93, 103, 71, 81, and 107. The upcoming projects include The Millennia (sector 37D) and Solera Phase 2, (sector 107).