MAKING AFFORDABLE HOUSING

Present market conditions show that there is a slump in the real estate sector. This slump is not on account of loss of demand for houses in the market. It is because of the fact that builders and developers have built so many projects costing per dwelling unit in the range of Rs40-50 lacs. This cost of per dwelling unit is not in the reach of middle class people. High class salary earners are facing difficulties in keeping their salary package intact. Because of looming recession there are salary cuts and reduction in perks and other benefits of these high class salary earners. There have been retrenchments in some sectors.  This has resulted in no further payment towards the cost of the flats. In cases where the home loans have been availed, the repayments of loans have been stuck up because of less net home-take salaries. Home loans have started becoming NPAs these days in banks. This has created a panic in home loan section. Banks have started desisting granting home loans further. In case of loans granted to builders and developers, the repayments are not forthcoming in these loans owing to reduction in sales of built up flats costing Rs40-50 lacs.

According to the government estimates, there is a shortage of close to 31 millions dwelling units. This shows that demand is very much there in the market. Only thing is that the cost of the dwelling unit should be in the range of Rs15-20 lacs which will be in the reach of the middle men. Therefore, if the builders and developers start constructing flats with low cost of Rs15-20 lacs there will be already available demand for these flats. This will boost the sales in real estate sector and will solve the problems of the builders and developers to a great extent. It will ameliorate the condition of real estate sector. It will help to improve the overall Indian economy.

Thus the government should take steps and issue guidelines to the builders and developers to build low cost dwelling units at large scale to fight the recession in real estate sector.