Housing for all by 2022

Mega housing scheme is in the process, which will offer the affordable houses to more than 5 crore subscribers of retirement fund body Employees’ Provident Fund Organization (EPFO). According to The labour ministry it will support the government’s mission ‘Housing for all by 2022′. The ministry is collaborating with housing finance companies, state-owned construction firms such as; NBCC, PSU banks and authorities like PUDA, HUDA, DDA to build affordable houses at a price to be fixed by the Central Government.

According to sources, “In present Labour ministry is preparing such schemes through affordable houses will be provided to the Employees’ Provident Fund Organization (EPFO) subscribers, especially to those who are in the low or middle bracket”. As per the records currently, there are more than 70 per cent EPFO subscribers, who are below the basic wage, which is Rs 15,000 per month. In the note from the Prime Minister’s office, He asked EPFO to promote affordable housing to only its subscribers and use its funds for that specific purpose. As per calculation EPFO can generate 70,000 crore to create 3.5 lakh additional in low cost, if EPFO will deploy 15 per cent of its funds for low cost housing.

Currently EPFO is managing the corpus of Rs 6.5 lakh crore with the annual incremental deposit of Rs 70,000 crore. The labour ministry is so much interested on a scheme under which EPFO subscribers can withdraw their PF deposits to make part-payment of the total cost of the house. Currently, EPFO subscribers can withdraw any amount of money from their PF accounts to buy houses only after contributing for a period of five years in the schemes run by the body. Ministry is also planning to provide subsidy to the EPFO subscribers who are in low-income bracket and this subsidy will help them to avail benefits of other low-cost housing schemes of the central and state government.

According to sources of Financial Institutions, “The housing loan at low interest rates will fall under priority sector lending for construction of affordable houses, whereas; these schemes will be optional for EPFO subscribers because there is no need to provide affordable houses to those who already own one home”. Under the housing schemes, there are three different income categories such as; high income, middle income and low income. Houses and other financial incentives under the upcoming scheme will be offered on the basis of the income of that particular subscriber.

The subscribers will be free to pay the equated monthly installments of their home loan through their provident fund account. As per the sources, under this scheme EPFO may use can use its funds to create a corpus for providing affordable housing loan at low interest rate to its subscribers.

Minimal drop in property sale in Mumbai

Even as Delhi and its surrounding region witnessed a 20% drop in sale, Mumbai saw marginal drop at just 2 per cent while Chennai and Hyderabad and Mumbai saw 18% and 13%, according to the 2014-15 real estate research survey by Liases Foras. Liases Foras, a non-brokerage firm, is into real estate researches. The survey was released on Thursday. It says that property sales across tier I cities in the country have dropped.  Proving that change in guard at the Centre has not changed the property market scenario.

The survey says that construction activity has increased in affordable and ultra-luxury segments in Mumbai. Flats that cost less than Rs50 lakh are selling more. Besides, the average prices have gone up in Greater Mumbai and Mumbai metropolitan region. In Greater Mumbai, this year a 2BHK costs Rs2.30 crore. Last year it was Rs2.14 crore… in MMR, a 2BHK flat cost is Rs1.32 crore while it was Rs1.20 crore last year, according to the report.

According to Pankaj Kapoor, MD, Liases Foras, “Currently, property market has been quite inflated and over-stretched. No one, including end-users and investors, wants to invest his/her money… and that has resulted in decline in property sales” . “Besides, there is a huge gulf between the current rates and expectations of end-users. They are still waiting for price correction. All things are attributed to the stagnant sales in Mumbai and other cities,” he told a newspaper. “Buyers cannot afford such costly houses. But developers have little choice. The land cost is already high and buyers have to pay various government taxes. If we meticulously calculate, buyers are forced to spend almost 10-15% of total flat cost on stamp duty, registration, valued added tax, service tax etc. To make houses affordable, the government should slash taxes,” Manohar Shroff, general secretary of the Maharahstra Chamber of Housing Industry (MCHI) demanded.

The Narendra Modi-led government cannot increase peoples’ income overnight. The current property market is beyond the reach of common man. An ineffective market will continue for some time. Despite low sales, developers are not bringing down prices. But they are offering sops such as waiving off stamp duty and registration charges to lure buyers.

You buy mobiles, cameras, laptops and even groceries online, so why not buy your dream residential flat on the net? If you were waiting for such a thing to happen, your wait is now over.

Online marketplace Snapdeal and Tata Value Homes, a subsidiary of Tata Housing with focus on affordable housing, recently announced partnership to enable users to buy houses online. As part of the partnership, about 1,000 homes across projects in cities such as Mumbai, Pune, Ahmedabad, Bangalore and Chennai will be put up for sale on Snapdeal. These houses are priced between Rs.18 lakh and Rs.70 lakh and range from 1 BHK to 3 BHK.

The idea was inspired by the fact that as per the reports, one in every two online real estate searches is to buy property and there is a $43 billion market opportunity here, said sources. We started selling homes through our own website last year in December and have already sold over 600 units. This partnership will help us take that to the next level,” Tata Housing Development Company Senior Vice President, Marketing and Sales, A. Harikesh, told a press conference to announce the deal here. Additionally, Tata Value Homes will continue to sell through its own portal as well, he added.

When you take possession of the house, customers buying the house through Snapdeal will get Rs.10,000 a month for a year as an assured rent whether they stay on premise or lease it out as part of the deal. “Details about the project and other things are shared on the website. Registered users can book a unit for Rs.30,000 and then our offline team takes over,” he said. However, the booking amount is not refundable in case the customer does not buy the house. E-commerce story is unfolding in a major way in India and it is predicted that more portals will embrace this idea of promoting realty. “We already have close to 50,000 merchants on our board. I think real estate, as a category, will do well on our platform because people trust our brand. We want to offer our customers the best deals,” Snapdeal co-founder and CEO Kunal Bahl said welcoming the home buyers on to his portal. Harikesh said the company also planned to launch new projects in Kolkata and Delhi-NCR before March 2015, which might also get added to the deal.

Real estate market of Mumbai is reeling under a peculiar situation, where supply is more and demand is less i.e. oversupply in housing segments. In Mumbai, there is overflow of premium residential and commercial projects and buyer is confused in making a selection. Affordable housing is in demand, but it’s facing the shortage in market.

In India, there can be no more cities with so many paradoxes. The spirit of Mumbaikar’s is amazing, but still there is one question that how long they can survive when the infrastructure is crumbling rapidly? Recent studies showing that real-estate games are capturing the attention and time of policy makers, rather than concentrating on critical issues such as; urban development, planning, infrastructure, solid waste management and traffic pollution control, they are looking at the growth of real estate sector.

Reason for this paradox situation:

 According to JLL (Jones Lang LaSalle) report, there is excessive supply of houses for higher-income segment in Mumbai and the price of these houses range from Rs 10000-30000 per sq ft. For middle income group the price of housing units range from Rs 5000-9000 per sq ft with the shortage of 20 to 30% and for low-income group housing units range from Rs 2000-3000 per sq ft with the shortage of 90%.

 Mumbai real estate market is facing such huge gaps, between demand and supply, one hand premium projects are in the excess and other hand affordable housing is facing the shortage of 90%. What is the reason for that? Limited land or government policies or delay in approval or budget housing projects? According to real estate experts it is due to combination of all these factors and few more.

Filmmaker Sudhir Mishra

Filmmaker Sudhir Mishra says, “Look the city such as; Rome and Paris, they belong to their residents, and the world class infrastructure allows them to live with dignity. But in Mumbai there is nothing for majority because they are thrown away in the outskirts, due to high cost of property”.  Shobhaa De, adds “In Mumbai many builders are putting their project on halt which contains 1BHk and 2BHK apartments, and opting for 3BHK and 4BHK or above construction, what is this? It is another attack on the common man”.

Few takers are for luxury projects in MMR (Mumbai Metropolitan Region), why?

• In Mumbai, buyer sentiment is affected by a lot of factors such as; hope for a low price, economic slowdown, lack of money and more.
• High numbers of new projects are making the Mumbaikar’s confused about the selection of property. Most of the projects are on hold or delay due to slow moving demand.
• Strict monetary policies and high inflation are affecting the buyer’s purchasing behavior.
• According to NDTV report, most of the new projects in 2014 are coming in Mumbai’s Western and Central Suburbs region, where as in these areas the demand of affordable housing is extremely high in these belts. So the transaction volumes of housing units in this area are too low.

Indian film director

Real estate experts saying that its due to lack of proper vision and dilution of planning norms, which is responsible for insensitive development. Vikas Dilawari, said that “Balanced and Sensitive development with well-planned infrastructure and proper urban design is the need of time. Famous filmmaker Mahesh Bhatt stated that “The curtain of fantasy needs to be drawn over an ugly truth”.

Here comes a shot in the arm of housing sector with none other than Maharashtra Chief Minister Prithviraj Chavan stating that the state government will ensure that middle income group people are able to afford their own houses.
Speaking after unfurling the tricolour at the Mantralaya here to mark the 68th Independence Day, the Chief Minister said, “It is very difficult for the common man to own a house in Mumbai or at other big cities in Maharashtra. For this, we have decided to work towards a goal of ensuring affordable houses. And it will be ensured that it happens at the earliest,” he said.
Since shelter is one of the fundamental needs of man, the government will leave no stone unturned in ensuring that every head has a roof over it, he said.
The Chief Minister said that the government will make Maharashtra an “online” state in the next five years, which will reduce corruption and help citizens avail government facilities.
“We want to make Maharashtra an online state that will help citizens avail all the services of the government sitting at home. This will make government procedures transparent and efficient at the same time. We will ensure that the scheme reaches across to even the smallest of villages,” he said.
“By launching the Rajiv Gandhi Jeevandayee Arogya Yojana, the government has tried to ensure that the needy get the best treatment free of cost. From the time it was initiated, around 5.62 lakh people have benefited from it and the government has spent Rs 712 crores on this scheme,” he added.