Vacant Affordable Housing – What can be done?

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With the governments appointed intention to provide affordable living to all by 2022. It is a point to mention the amount of surplus flats lying vacant. Which as a result brings leads to unsold inventory. So what can we do in regards to Vacant Affordable Housing?

As of 2019, Mumbai had the highest unsold homes inventory. With almost 23,930 units as of the first quarter of 2019. In terms of the luxury housing quarters, Homes priced at 1.5 Cr – 2.5 Cr observed a fall in the first quarter from 48,300 units as of 2018 to 42,650 units in 2019.

Frankly, there are three main reasons this could be happening.

  • Livable Infrastructure

Good old-fashioned miscalculation where developers had not perceived the feasibility of the project prior to the launch.

This leads to the formation of inhabitable buildings, in distant areas simply too far to work from. This creates a void in the market area due to lacking Livable Infrastructure. This can include traffic related specific infrastructure where there are less or no feasible modes of transport. Or it may involve the unavailability of workplace hubs in the area. 

Not taking these simple points into consideration. The developer just went ahead launching an affordable housing scheme from cheap land where local development regulations were lax. 

  • Second Rate Construction

Before the arrival of RERA, many buildings had considerable flaws in their design and construction. These inferior project are not approved by RERA. Let along marketed or sold. The reason for this is that RERA is extremely strict in regards to factors like construction quality.

Which is why RERA registration is a must.

  • Legalities

RERA is also strict on projects which have launched without the proper approvals in place. This obviously becomes unattractive to buyers who avoid them for approved and fully compliant projects. And with the pile Vacant Affordable Housing, there’s no shortage of options. However, if the legal transgressions are minor permissions can be obtained after a fine is paid and structural changes are observed.

So what should be done to make Vacant Affordable Housing more Marketable?

The “housing for all by 2022” puts the Government under pressure to deploy situations to remedy the unsold stock. Not just in regards to prospective home buyers but also to the developers who have put their faith in the Government as well.

  • One method would be to set up Tax amnesty schemes to organize projects with minor deviations that don’t breach legalities and become a deal-breaker. .
  • Rapidly deploying infrastructure in uninhabitable areas with unsold inventory. Even if this is not an immediate process, Immediate buyers can take some comfort in the hope of change to come.

If you’re interested in taking your first steps to buying a home do get in touch with us at Real Estate Mumbai.

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