Countries like India, China, Macau, Singapore, and Hong Kong face severe housing shortage in both urban and semi urban areas as the population density is quite high.
The Affordable Housing program is to provide housing units to that segment of our society whose income is below the average household income. It covers the economically weaker sections of the society along with the middle-class section.
Current Scenario of Housing in Rural and Urban India
While looking at the housing sector in India, we often forget that nearly 60% of the population of India resides in villages. Although there is not much shortage of land in the rural areas, the efficient usage of such lands is the real problem. Apart from that rural India also lacks infrastructure development, trusted real estate companies, uninterrupted electricity supply and efficient connectivity. More people are migrating to big cities for better and healthy living. While the space is limited and the population of our country is growing at a significant pace, affordable housing projects appear to be the only sustainable solution to the problem.
Need for the Boost of Affordable Housing in India
As per the estimations by Urban Housing Shortage, there is a wide gap between demand and supply of housing units in India. Continuous efforts have been made over the years to provide low cost homes, Yojanas like JNNURM (1994), Rajiv Awas Yojna(2013), & the Pradhan Mantri Awas Yojana (2015) have shown significant impact with an aim of ?Housing For All? by 2022.
The Central government has decided to provide 100 per cent exemption on income from interest, dividends and capital gains on investments made by sovereign wealth funds in infrastructure in India. It also includes investment in affordable housing projects. The deadline of 31 March 2024 has been set for availing this benefit with a minimum lock-in period of three years. This measure is expected to boost the real estate sector of major cities like Kolkata, Mumbai, and Gurugram, thereby creating jobs, which will result in a greater pool of homebuyers in the affordable housing scheme.
Growth in Housing Loan
Over the next five years, Indian home loan market is expected to see a major hike. There are two major reasons for such growth. Firstly, the home loan interest rate is relatively cheaper in comparison with other developed and developing economies. Secondly, the acute shortage of supply of housing units is a reason.
Home loan market in India has been categorized upon type, source, interest rate, tenure, area of property and region. In terms of source, the market can be segmented into bank and housing finance companies. Bank is the dominating segment in the market. HDFC, ICICI and SBI are the leading players in India home loan market. This is due to lower interest rates and various home loan schemes catering to customers.
