The share of read to shift house as a percentage of total sales rose to 20 percent during the 2019-20 financial year as against 15 percent in the previous fiscal.
Mumbai has highest number of ready to shift house inventory unsold. Developers had an unsold stock of over 2.50 lakh units at the end of 2020 in Mumbai Metropolitan Region (MMR). Out of these, over 1.41 lakh units (over 48% of the stock) are priced up to Rs. 45 lakh. While the mid- and high-end segment in the real estate sector is especially struggling to find buyers, the affordable or low-cost housing is
A housing Project of Ajmera Builder in Wadala, Mumbai
the only segment which is witnessing traction from both buyers and developers after several incentives and schemes announced by the government started focusing on the segment. Almost fifty thousand houses are ready to shift house.
Availability of semi built house
The latest in a series of government incentives was the Rs. 20,000 crore stress funds announced by finance ministry particularly to provide last-mile liquidity support for affordable and mid-segment housing projects.
Prior to that, in the Budget 2019, government announced additional tax deduction of Rs. 1.5 lakh on interest paid on home loans taken for buying an affordable house. In total, from financial year 2019-20, a home buyer can claim a deduction of up to Rs. 3.5 lakh against interest paid on home loan taken to buy an affordable house.
Accessibility of formal institutions
Owning a home of their own is the dream of all. A home is not just a piece of land to accommodate yourself and your family, but also seems to be an asset that can be used in bigger cash crunch situations. A home is a valuable asset that can be used for living, selling, or getting a loan; it doesn’t lose its intrinsic value and can be used by many generations. However, buying a home needs a lot of money, which was the main hindrance that prevented many people from realizing their dream of owning a home. Today, arranging finance for home purchase is not so difficult as home loans have become much more accessible than they were a decade ago.
Due to increase in income, availability of several financial institutions offering affordable housing finance options, decrease in interest rates, ease of registration, and online process, getting a home loan has become much faster and easier. Here are some changes that took place in the world of housing finance in the last couple of decades that made it more affordable and accessible for common people of the country:
Availability of Housing Loan
Lending supply in unrestricted manner is a major boost for the housing demand, however I observed that cumbersome paperwork inhibits home loan borrowers for purchase of houses. Most of the PSU banks are giving housing loan and their rates are quite competitive too, but still borrower prefers to avail loan from NBFC due to lesser
paper work and simplified terms and condition, for which they are charging a premium in interest rate.
After debacle of ILF&S housing demand in Mumbai has nosedived, as there is immense liquidity crunch with the NBFCs.
Affordability of House
Mumbai is ranking 7th among the top cities of the world for luxury housing demand. Houses being sold in the area of South Mumbai, which includes Napean Street, Malabar Hills, Lower Parel, Prabha Devi are in range of a million dollar to upto ten million dollar.
But the real demand comes from the suburban Mumbai, which includes areas of peninsular Mumbai areas like Powai, Andheri, Juhu, Borivali, Kandhivali and areas of NaviMumbai like Vashi, Kharghar, Sea wood has considerable demand and are quite affordable to the high income middle class hoi polloi. Price map can be seen hereunder.
Tata’s have developed very affordable homes in Boisar. However, this place is more than hundred kilometers from Mumbai South.
Mumbai has a market for housing for investment need of individual as well as companies. Mostly for the capital increase and rental income. In 2019, it is perceived that housing demand is shifting from south Mumbai to suburban areas. Normally a house with a rental income of Rs. One lakh comes at a price of Rs. 5 Crores. However after the tax deduction the effective earning for house owners are hardly 65000, which is less than 2% annually, hence the Mumbai residents are shifting their preference for houses in suburban areas where houses are in the price range of Rs1- 3 Crores and less and fetching rental income from Rs. 30000 to Rs. 1 lakh, hence giving handsome income to the house owners.
Mushrooming population and nuclear families
India has lower urbanisaton rate in comparison to other market. There is tendencies for nuclear families which is further escalating up demand for housing for their primary need.
Prompt evolution of a nuclear families and swelling population of India is significant elements of demand pull in real estate. Tier I and II cities like Bangalore, Mumbai, Lucknow, Chennai, Pune, Hyderabad and Delhi have become hubs for education and commerce. People migrate to these cities practically every day in search of better opportunities. Growing population in any place fabricates a need for living space. Further associated features such as a rise in nuclear families and divorce rates have also led to increased demand for property in cities.
Number of household in that locality
Demand for housing also demand for the number of families residing in that locality.
Lodha World Tower in Parel, Mumbai
Mahindra Lifespace Developers Ltd. (formerly Mahindra GESCO Developers Limited) is the real estate and infrastructure development arm of Mahindra & Mahindra Ltd. GESCO Corporation Limited was incorporated as a Private Limited Company on 16 March 1999 which was converted to a Public Limited Company on 18 August 1999. GESCO was originally the real estate division of Great Eastern Shipping and was spun off into an independent company in April 1999. In 2001, GESCO Corporation and Mahindra Realty & Infrastructure Developers Ltd (MRIDL) demerged the realty and infrastructure divisions of MRIDL and merged it into GESCO.In 2007, the Company name was changed from Mahindra GESCO Developers Limited to Mahindra Lifespace Developers Ltd. (MLDL)