Why Affording a House is No More Complicated?

Roadblocks

Although developers are coming up with affordable housing yet, the real estate segment confronts many challenges.

Brotin Banerjee, managing director and chief executive officer, Tata Housing Development Company said "On the supply side, there are issues such as lack of availability of land in urban areas, rising cost of construction and regulatory roadblocks. On the demand side, lack of access to home finance impacts the ability of low-income groups to buy houses in the organized sector," reports Business Today.

Getting approvals for projects is also a major problem facing by the developers. "Long lead time for approvals is primarily because the government has added new authorities without removing the earlier ones," added Banerjee.

Another big problem is projects are to be built only on non-agricultural land. Therefore, developers need to change the agricultural land to non-agricultural land when developing projects in peripheries. "The process for conversion from agricultural to non-agricultural land is a problem. There is a plethora of no-objection certificates required. This takes a lot of effort and time," said Banerjee.

Regulatory Pressure

Though developers are facing lot of challenges, the government is trying hard to promote affordable housing.

"For effective implementation of low-cost housing projects, it is imperative that the government ensures availability of land at subsidised rates, fast approvals, property tax relief, funding support, additional FSI, connectivity to suburbs and creation of special residential zones," says Banerjee of Tata Housing.

"For buyers, a combination of low-cost and easy credit, especially for those who are still not part of formal banking channels, is the first step for the success of affordable and low-cost housing initiatives," he adds.