Affordable housing to drive realty in 2018: set to boost the economy by $1.3 trillion
Affordable housing to drive realty in 2018: set to boost the economy by $1.3 trillion

The affordable housing segment is expected to continue to drive the real estate sector in 2018 with several developers and institutional funds eyeing opportunities in this space led by better returns. The end-user demand in this segment along with the Government's thrust through incentives such as granting infrastructure status is ensuring a rising appetite for such projects across the country. 

Some branded developers, catering to the ultra-luxury segment, have expanded their focus on compact, efficient, boutique homes for high and mid-level income category of buyers, a trend that is expected to gain further momentum.

With both regulatory and taxation policies in the form of Real Estate (Regulation & Development) Act, 2016, and GST in place, property development environment will be stable and make the business a more standard process. With RERA in place, the end users' interest in the residential sector will become positive as investments will be legally protected and there would be a commitment to timely delivery from developers.

The velocity of project cash flows is much higher in affordable housing compared to the conventional real estate as most units are sold out long before they are constructed. This translates into better risk-adjusted returns for investors.

PM Mr. Narender Modi's plan of building homes for all by 2022 is set to boost the economy by $1.3 trillion, create 60 million new houses and over 2 million jobs annually.