The Haryana government's affordable housing policy, which permits the state government to sell apartments built by developers at fixed rates, is attracting builders as it offers certainty of sale, according to experts.
Developers like Signature Global, MRG World and Royal Green Real Estate have planned launches that will offer properties in desirable areas in Gurgaon for ₹25-35 lakh.
"Haryana's affordable housing development hub is Gurgaon, which has more than 1 lakh units under construction and more than 125 affordable housing projects taking shape," said Pradeep Aggarwal, founder of Signature Global (India). "Developers are thus hopping on the current demand-supply mismatch to launch a bunch of projects in this fiscal that will further propel sales up. Because of the viability of the Haryana model and the magnitude of projects in the pipeline, it is the most affordable housing model to date."
The whole ecosystem is driven by a demand-supply matrix. About 50 million people are estimated to be in need of affordable housing.
"The semi-luxurious infrastructure, affordable prices, and socio-economic dynamics are all contributing to the spectacular response it has been drawing from all quarters," said Vikas Garg, deputy managing director of MRG World.
The programme provides rebates to developers and allows them to offer commercial space to generate revenue.
Under the Haryana Urban Development Authority (HUDA) Affordable Housing Scheme, the price of a 2BHK unit starts at ₹20 lakh, plus 1% GST. Under Pradhan Mantri Awas Yojana Programme (PMAY), the government will grant a subsidy of ₹2.67 lakh.
"The entire process is online and transparent, and that has instilled confidence in homebuyers. Additionally, it has further decided to boost infrastructure development by creating 300 km of new roads and improving 6,000 km of existing roads," said Yashank Wason, managing director of Royal Green Realty, which is developing an affordable housing project at Golf Course Road Extension. "This will be a direct factor in the emergence of growth corridors and will lead to a domino effect in the housing market."
Since affordable housing has been granted industry status, the government has been providing several incentives to the industry. As a result, loans are available at reduced interest rates and several consumer-centric approaches have also been implemented to stimulate demand. Subsidy under PMAY is one such incentive.
"Although the recent rate hike will not have any major bearing on the sector, with increased raw material costs, it is definitely making affordable projects a bit unviable for builders, hence the need to relook at the measures to reduce input costs," said Vikas Wadhawan, Group CFO, Housing.com.