The upcoming strong market of India is going to be the affordable housing segment. During the first half of 2016, 60,000 affordable housing units have been launched across top 8 property markets in India which are Pune, Mumbai, Bangalore, Delhi, Chennai, Kolkata, Hyderabad and Ahmedabad. Currently, affordable housing seems to grow in metropolitan centers and the largest demand hails from such centers. In terms of supply, the considerable market is Tier II and III cities. But in terms of demands, metro cities sees far rise in these centers. With notable players getting into the market and with a rising emphasis on affordable housing, the ability for home buyers in these cities has started to surpass expectations. If the home loan rates vary between 5-7% in the next 10 years, the future of this segment will surely be vivid.
The real estate sector is highly regulated and mostly been driven by loan-based consumption. Also, demonetisation will have an aftereffect on the current liquidity of the whole market, but as a sector, not much notable changes are seen. It is expected that the demand will rise and the current flow of funds is likely to result in competitive lending thus lowering the interest rates.
The basic step needed for this sector is to do the faster implementation of policy infrastructure, thus, enabling the ease to do business along with faster financing and smoother taxation. This can be further boosted by decreasing the lending rates. Many positive policies have been announced for the real estate sector which will lead to a better growth of affordable housing section.
By opinion makers and consultants, a demand of nearly 20 million units has been documented for housing. So, it is irrational to question the strength of housing demand as there has always been a strong demand. A misleading perception has been developed in the minds of buyers regarding the soon price correction as a correction of 20-25% has already taken place in 2014-15.