Affordable Houses Now Unaffordable

Affodable House in SLO
The Only Affordable House

March 10,2010
The fact that inflation rate and overall prices of raw material are rising is becoming one of the major reasons for  the property price rise.

In the last few months, developers have boosted up the property prices by 10 to 35% while offering  exciting packages as a gadget to attract buyers.

The joint managing director of Royal Palms,Mr. Dilawar Nensey accepted that they have accreted prices from Rs 3,999 to Rs 4,930 per sq ft but on the contrary, also claim that it is still 25 to 30% cheaper than the other available properties of Goregaon and Mumbai.

According to experts, there were 300,000 affordable homes announced by the developers across India 15 to 18 months ago to tide over the burden in the property market and mop up resources to pay back debt.

CEO of Liases Foras, a property research form that tracks projects and prices, Mr. Pankaj Kapoor reported that in order to show high sales, an aid of launching affordable housing was used. So far, no delivery is started. Most of the projects have not yet been started even.

Although many examples of such projects remain stalled due to lack of approvals, it seems that Tata Housing’s project at Boisar, 120 km away from Mumbai will be handed over to buyers later this year.

Nensey claims that ideally, an affordable house should be a basic one but be priced about 20%to 40% less than the prevailing rates. However, with the tag of ‘affordable’, developers are selling their projects in far-flung areas at the prevailing prices.

Another problem is location. Dearth of infrastructure and hikes in transportation costs makes the cheap home unavailable, if the drive to work is 100 kms.

Kapoor concluded with his words “Only a superman can afford to stay in an affordable home… and zip to office through the air!