Real estate developers are expected to deliver over 4.5 lakh affordable housing units in the coming 15 months, shows a research report by PropTiger.com, at a time when the Centre has incentivized purchases in this category by offering higher tax benefits. With the vision of providing housing for all by 2022, the new Government has rolled out various measures to boost the sector in the last few months. Notably, during the union budget announcement, the government increased the tax deduction limit on the interest paid on home loans by Rs.1.5 lakh to Rs.3.5 lakh annually, in cases where the unit price does not exceed Rs.45 lakh.
The report by PropTiger.com, which is part of Elara Technologies Pte. Ltd. that also owns Housing.com and Makaan.com, highlights how India’s real estate developers have changed their approach amid changing market dynamics, showing a greater commitment towards project delivery than on new launches. As per the report, India’s nine major property markets would see the delivery of nearly 7.95 lakh housing units between October 2019 and December 2020.
Over 3.1 lakh units are set to enter the market in the last three months of 2019 while the remaining 4.83 lakh units would be delivered through the course of 2020. If we factor in the 2.88 lakh units that have been delivered between January and September 2019, the total number of units delivered between 2019 and 2020 would exceed the one-million mark.
“The demand for affordable homes is expected to increase in the near future amid record low-interest rates and higher tax benefits. Considering 26 percent of all units set for delivery in the next 15 months are unsold homes, new home buyers will have plenty of ready-to-move-in options to pick from. In the past, project delays have resulted in developers attracting negative publicity, which has dented the fortunes of many and left several others struggling for survival. A reset in this regard is absolutely necessary to bring back the missing trust factor among home buyers. Now that the government has announced last-mile funding for stuck projects through the launch of the Rs 20,000 crore stress fund, project delivery rates will hopefully improve further in the near future,” says Dhruv Agarwala, Group CEO, Elara technologies, the country’s only full-stack real estate technology platform that owns PropTiger.com, Housing.com and Makaan.com.
City-wise break up: Mumbai, Noida, Pune to get the biggest delivery package
A city-wise break-up shows the majority of the units would be delivered in the MMR and the NCR markets. While the MMR would get homes delivered to the tune of 2.45 lakh, the NCR would see the delivery of over 2 lakh units. Another 1.29 lakh homes would be delivered in Pune between October 2019 and December 2020.
Configuration-wise break up: 2 BHK homes rule the roost
The bulk of the units set for delivery in the next 15 months would be 2BHK and 1BHK units. Nearly 3.45 lakh of all units set for delivery would be 2BHK homes while 2.16 lakh homes would be in the 1BHK configuration. Another 1.95 lakh units will be 3BHK homes.
While the majority of 2BHK units would be concentrated in the NCR, a large part of the 1BHK homes would come up in Mumbai, a market where smaller homes are popular among buyers because of space constraints.