2015 proved a sluggish year for the Indian real estate industry. It failed to bring the hoped-for development in residential real estate market. However, the good news is that the bad days have begun to fade and the sales have picked up in some major cities like Hyderabad, Mumbai and Bangalore. Still, there’s a lot more required.
Showing concern towards the deteriorating status of residential real estate market in India, public works minister Eknath Shinde said that creating affordable housing schemes is the need of the hour. It seems to be the only solution to guard the real estate industry from the current slowdown it is facing.
The government has already started working for creating over 6 crore affordable houses in the impending years for which the state is expected to receive around 25 lakhs. Moreover, the Mumbai Metropolitan region would see around 11 lakh affordable housing facilities.
“There is a huge demand in this sector and the government is actively thinking over bridging the demand and supply gap. Creating affordable homes is the only way to fight off the recession in the real estate industry,” he said.
During the last year’s budget announcement, Finance Minister Jaitley in his speech revealed that India was facing an urban housing shortage of approximately 20 million units. With a number of affordable housing schemes including the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), Affordable Housing in Partnership (AHIP) scheme and Rajiv Awas Yojana (RAY) that were introduced by the previous governments, this breach should have been filled up. Still only 220,000 houses were constructed in the past three years. Also, a majority of homes were sold at a price greater than Rs. 10 lakhs, which was a number out of the reach for the EWS and LIG segments.
Seeing the scenario, it was proposed that government will have to develop over 2.5 million houses per year by 2022. Looking forward to reach the target, the government is working ways to ease the business where the number of consents required for building houses will be lesser and the procedure faster. In addition, Environment clearances presently afflicting the real estate industry will also be sorted out with discussions.
This means the housing issues in India cannot be solved just by creating number of houses but also to sell them on a price, which is afforded by every section of society, including LIG and EWS.