Region
(NCR) and Bangalore have been found to be the most unaffordable locations for housing
for India's middle-income groups (MIGs). MIGs, defined as households with annual
incomes between Rs 9 lakhs to Rs.I0 lakhs are unlikely to find their desired
kind of homes anywhere close to the city centre in these three metros, according
to a study. On the other hand, Kolkata, Pune and Chennai are seen to offer a good
number of affordable locations to MIGs. The study first looks at the factors
most important to a consumer in his house buying decision and his budget, and
then tries to find locations where these conditions are met.
The Reserve Bank of India (RBI) has made it easier
for banks to lend to special economic zones (SEZ). Several types of advances to
projects in special economic zones have now been excluded from the definition of
commercial real estate loans. Reference to SEZs as commercial real estate loans
by RBI in a '06 circular had made it difficult for those involved in these projects
to raise funds. Real estate loans are considered risky and categorized as an average,
MIGs would have to stay at a distance of 45 km away from the central business district,
in areas that have poor connectivity and scant infrastructure, in order to get
their ideal affordable home. This is due to the fact that land prices in the
city are so steep that even smaller size units of about 600 sq ft that are acceptable
to Mumbaikars would not be affordable to MIGs. So buyers will have to settle for
places like Panvel, Virar and Kalyan. Similarly, in the NCR, due to the high cost
of land, MIGs would have to look beyond Meerut and Sonepat for affordable homes.
In Bangalore, MIGs are seen to be highly concerned about part of exposure to
sensitive sectors which also include capital markets and commodities. There are
also restriction on foreign investment in real estate.
Speaking to ET, LB Singhal,
director general, Export Promotion Council for EoUs and SEZs said "We had
taken up this issue with the ministry of finance and the ministry of commerce. The
matter was before the empowered group of ministers headed by finance minister
Pranab Mukherjee, which connectivity to their office. And the problem in Bangalore
is that as one starts to move away from the city centre, road and other necessary
infrastructure starts to deteriorate. The survey found that MIGs of Bangalore preferred
residential units ranging between 850 sq.ft. and 1050 sq.ft. in size. Given this
preference for large units, very few locations in Bangalore would be affordable
for consumers in the Rs.5 lakhs to Rs.8 lakhs Income bracket.
Affordable locations include
Kanakapura Road, Hebbal, Electronic City, BTM Layout and Whitefield, where it
would be possible to find units costing between Rs.15 to 30 lakhs. had decided
that SEZ should be treated as infrastructure." He added that now with the
central bank clarification, loans to those developing, operating and maintaining
SEZs as well as setting up or acquiring units in SEZs wiIl be part of infrastructure
lending.
"This would enable domestic institutions
and banks to make funds available to SEZ sector on the terms and conditions which
are applicable for infrastructure lending," he added.
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