The percentage of mid-market houses which cost between the price points of Rs 20 to 50 lakhs has reached an all-time high. According to a data released by the real estate consultant Square Yards, the sale of such homes comprised about 42% of the total residential transaction in the last two quarters of the current fiscal year. It was seen that the share of the mid-market homes was going up about every six months in the last couple of years. It had accounted for the 29% of overall residential sales in the first two-quarters of the FY 17 and then rapidly climbed up to 32% in the second half of the FY same year. It went on to touch 42.7% of the entire residential sales in the first two-quarters of the current fiscal, growing at a rate of 21% CAGR.
The reason for such rapid growth is the latent demand in the housing industry. Property purchases in India are often a market for social success and while the middle-income group in the country cannot afford luxury homes, there has always been a demand for affordable homes which is not matched with adequate supply. This category is becoming quite important when it comes to home sales and developers are also bringing the new property into the market for this target group. Mr. Tanuj Shori of Square Yards, the Founder and CEO opine that this segment will also be the driving force behind the future success of real estate property in India.
In the same vein, as expected, there had been a number of rapid launches for new projects in the mid-market housing project. Developers are also coming with dedicated projects that will cater to the new and urban, young and contemporary middle-class group in India which is rapidly emerging. The projects like Joyville from Shapoorji Pallonji Group or HomeKraft by ATS are some of them. It has been seen that the parent companies are still building homes for other categories but there is a great emphasis on the mid-market houses category as well that is going to help them leverage the government benefits as well.
Moreover, the middle-income group also has more incentive now, thanks to schemes like PMAY where they can now enjoy subsidies up to Rs 2.30 lakhs to 2.67 lakhs. This has already been provided to a large number of population for families whose income range is between Rs 18 lakhs per annum. The PMAY scheme has also designed in such a way that it can benefit those with slightly less annual income and yet they have a wide range of apartment sizes to choose from. With the GST lowered from 12% to 8% and with the rates slated to go down even more in the future, the market is looking is sure to look up. Tanuj Shori of Square Yards has opined that he developers have also been able to pass the benefit of lower taxes in the form of lesser prices flats which will definitely make the process more affordable for the home buyer. Keep trying.
Square Yards is a technology-enabled, global real estate aggregator and India’s largest player for primary residential real estate. It’s subsidiary Square Capital is one of the largest marketplace for secured mortgages in India. Square Yards platform offers an integrated consumer experience & covers the full real-estate journey from search, discovery to research, transactions, home loans and post-sales service – fully integrating buyers to an extensive network of 500+ partner real estate developers, and 90+ banks & NBFCs. Square Yards is led by accomplished professionals, ex-bankers, and Ivy school alumni and is backed by the competence of more than 2500 employees in 30 cities and ten countries.