Affordable housing and your profits!

January 11, 2018

What is Affordable housing?

• Affordable housing refers to housing units that are affordable by that section of society whose income is below the median household income.

• Affordable housing segment is expected to be the next big growth driver of the Indian economy with property pundits predicting a phenomenal growth rate of over 30% in the medium term.

• According to Knight Frank India, a real estate consultancy, there has already been a significant surge in affordable housing projects across eight major cities. 

• Homes priced below Rs 50 lakh accounted for about 71% of the total launches between January and June 2017, a significant 52% increase from the corresponding period in 2016. 　

Saste Makaan=Achhe Makaan Affordable housing is finally losing its ‘down market’ label and turning into a serious and respectable sector - a possible game changer for the real estate industry.

Government's boost to affordable housing

In 2015, Prime Minister Narendra Modi announced the ‘Housing for All by 2022’ scheme targeting two crore homes to be built across all urban locations over the next five years.

• The government has granted the much-coveted infrastructure status to affordable housing, giving developers access to cheaper sources of funding, including external commercial borrowings (ECBs). 　 • Affordable housing promoters have been granted more time for project completion - the deadline has been increased to five years from the current three years.

Developers warming up to affordable housing

As a result of policy thrust and financial support, more developers are keen on making inroads into the segment. The latent demand for affordable housing always existed but with regulatory and government support and increasing urbanization, more and more developers are finding the segment lucrative.　

Now let's discuss the blog caption i.e Affordable housing and your profits

I would first like to clear some air by saying that stock market sensex works in bit of a synchronization with economy but not all stocks always imitate the sensex's performance.

Example sensex(Stock Market) might be rising but a particular sector's stocks might be falling due to any reason.

• Affordable housing is at the center stage of India’s real estate movement and this story is likely to unfold for multiple years.

• There has been a big push at macro and micro level towards affordable housing which as per my analysis will definitely boost not only the entire infrastructure sector but also the related ones. 

• Housing is directly related to Builders, raw material, infrastructure, loans, engineering, procurement, contracts and many more which opens a wide array of money making opportunities for us in the capital markets.

If invested at the right time at the right place and more importantly for a good period of time, your investment not only becomes risk free, rather gives you deep pocketed returns compared to other investment avenues.

So lets get straight to the business and make money by investing into capital markets and making the most of the opportunities that India as an economy is offering us because government’s financial and policy thrust, regulatory support, rising urbanization, and increasing affordability is converting demand for affordable homes into a commercially viable opportunity.

The sun is finally rising on the affordable housing segment.

Unawareness is bad but indecisiveness is even worst, so get along to change your financial health and let your money earn some extra honey for you.

Gagandeep Singh Taluja (NISM/SEBI certified investment advisor)