Single-Window Clearance Is A Must For Affordable Housing, Aggarwal of Signature Global

Housing in India is available in different sizes and price points. From studio apartments to plush villas and penthouses you have it all. In a diverse economy like that of India, industry experts believe that affordable housing was going to be the next big thing in the Indian real estate sector. Property pundits are of opinion that affordable housing will be clocking a growth of at least 30 per cent in next three to five years.

While there is a remarkable increase in the number of affordable units being launched, there is still a long way to go to achieve the objective of the Housing for All By 2022. To understand how the industry can leverage the affordable housing segment, Housing News Editor-in-Chief Jhumur Ghosh had a candid conversation with Signature Global Co-Founder and Chairman Pradeep Aggarwal.
 
Edited excerpts:

Ghosh: Was affordable housing the best-performing real estate segment in 2017?

Aggarwal: When Prime Minister Narendra Modi announced affordable housing as one of the key agendas in 2015, it was evident that the segment would be a driver for the real estate sector in the times to come. As the premium segment is still struggling with challenges such as delayed delivery and cash crunch, the confidence of developers and consumers has been shaken. However, affordable housing is a positive trend as homebuyers from lower-income groups or economically weaker sections can now fulfill their dream to buy a home of their own. In the next five years, we are expecting that the affordable-housing segment will give a new shape to the Indian real estate sector.

Ghosh: Do we need put more thrust with respect to policy making for fulfilling the Housing-for-All mission?

Aggarwal: There are many challenges and drawbacks that the sector is dealing with. In order to carry out the mission, there needs to be a solution. For instance, single-window clearance is a must for affordable housing. Clearances for affordable-housing projects should be given on priority basis as well as plans should be pre-approved, instead of getting approvals later, which might take up to a year. The government should focus on speedy approvals. For achieving the mission by 2022, we need to build 40 lakh houses every year and 10,000 houses every day in urban areas. This is possible only when the private players and state governments work in sync. The government can also create Special Housing Zone similar to that in China, Hong Kong and Singapore, where regulated construction should be allowed and masses of people can be accommodated at once. The land allotment should be quicker and government should motivate and incentivise private players to enter the affordable housing segment.

Ghosh: Can we say that the Pradhan Mantri Awas Yojana (PMAY) is helping people buy homes?

Aggarwal: People in urban cities spend maximum part of their income on house rent. For them, affording a home in a metro city is like a dream. However, the PMAY is a milestone for achieving the Housing for All Mission. For a 2BHK home in the National Capital Region (NCR) bought under the PMAY scheme, the equated monthly installement (EMI) is less than Rs 15,000, which is equivalent to its rental value. While there is limited awareness when it comes to the benefits and advantages of the scheme but the PMAY would gain popularity with time.

Ghosh: Do you think affordable housing will help in minimising demand-supply mismatch?

Aggarwal: There is a huge demand for affordable housing but the supply is too low. The government needs to encourage developers to enter the segment by providing low finance cost and easy approvals, among others as incentives. This segment, which got an infrastructure status in Budget 2017-18, is yet to reap the benefits of this elevation. The cost of finance for the builder community still remains the same. The government should push financial institutions to provide developers cheaper loans for affordable housing projects. Approved affordable housing projects should be funded by the government bodies.

Ghosh: Affordable housing is also one segment which has a lot of fly-by-night operators. Can you give some tips to our viewers on how to choose an affordable project, without getting cheated?

Aggarwal: Homebuyers should enquire about the developers, track record of the builders and promoters, etc. Also, buyers should check about the scheme under which the affordable house is being offered. Ask your developer about the license of affordable housing policy. Ensure your developer is real estate regulatory authority (RERA)-registered and the project is listed on the RERA website. Homebuyers should be aware of their rights under the real estate law. Homebuyers should not skip the site visit and rely completely on brochure or sales pitch. Investors and buyers should keep on a timely check on the project development course before making payment.

Ghosh: How is affordable housing performing in the Gurugram market? What are the kind of projects available and what is the size and cost of affordable apartments in Gurugram?

Aggarwal: The Haryana Affordable Housing Policy is a model policy for the entire nation. There is a clear mention of the kind of amenities to be provided, size of units, facilities etc. and no developer can make any modification. Areas such as Sector 71, 81, 103, 107 are popular for affordable housing in Gurugram. All of these sectors are part of urban areas and not extended suburbs unlike any other city where affordable housing means 'forest-housing'. This is the best time to invest in affordable housing to earn maximum returns.