Budget housing inventory is lying vacant in 7 cities around India due to lack of support infrastructure
Around 2.37 lakh housing units (flats) across top seven cities belonging to the affordable housing segment (units priced less than Rs 40 lakh) were left unsold as of second quarter of 2018. The cities, namely Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru, Pune, Kolkata, and Hyderabad.
This number pertains only to the unsold units of organised private developers and does not include government housing schemes, which essentially means that the number would go further northwards if those are included. This figure was revealed by Anarock Property Consultants, a real estate consultancy firm. According to the report, most of these houses are lying vacant because they lack infrastructure, connectivity, bad construction and no proper approvals.
Anuj Puri, Chairman, Anarock Property Consultant said, "In any discussion about affordable housing in India today, the fact that a lot of such houses are lying vacant is bound to crop up. One may point out that with the Government's avowed intention of providing Housing for All by 2022, this supply should logically bridge the affordable housing gap. However, a lot of this budget housing inventory is lying vacant for good reasons."
According to the report, many barren projects are the result of good, old-fashioned miscalculation, the developers had not undertaken thorough feasibility studies prior to launch. They just went ahead with launching affordable housing in an area because the land was cheap and local development regulations were lax.
"When housing comes up in areas which are simply too far from the city's workplace hubs and lack the necessary support infrastructure — most importantly transport-specific infrastructure — the results are fairly predictable," said Puri. Most projects according to the report have serious flaws in design and construction and were launched before RERA hit the market. RERA also applies retrospectively to under-construction projects and is very strict about factors like construction quality. It is strict on projects which were launched without the necessary approvals in place (and also on non-approved floors in otherwise approved projects). This obviously makes the apartments in them unattractive to buyers, who shun them in favour of fully-compliant developments.
The solution according to Puri is, to rapidly deploy infrastructure in areas which have unsold budget housing. Even if this cannot happen immediately, buyers will still take some comfort from a formally-announced plan to deploy such infrastructure in the foreseeable future. The second way out would be to announce amnesty schemes to regularise projects with relatively minor deviations (with certain provisos and conditions) and/or were built without the necessary approvals.
FLAWED
- Around 2.37 lakh housing units across top seven cities belonging to the affordable housing segment were left unsold
- The cities are Mumbai Metropolitan Region, National Capital Region, Bengaluru, Pune, Kolkata, and Hyderabad
- Most projects have serious flaws in design and lack necessary support infrastructure
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