New Delhi, March 6:  

The Budget has announced a slew of measures to boost affordable housing sector, but experts believe that it will be challenging to meet the target of building two crore dwelling units under ‘housing for all’ mission, on the back of poor macro-economic sentiment and lack of job creation.

The flagship scheme, launched in June 2015, aims to provide two crore houses for urban poor by 2022. This comes to over 33 lakh houses each year for the next six years.

This target seems ambitious given that construction of 5.09 lakh houses for economically weaker sections has been sanctioned till date.

“In-situ slum redevelopment will be a challenge in order to realise the mission as it involves slum rehabilitation. But, even if the government can realise 60 per cent of the target outlined, it should be considered an achievement,” an official in the Ministry of Urban Development told BusinessLine.

States are showing competitive spirit in this mission and the recent Budget announcements should also go a long away in boosting demand and supply for affordable housing, the official added.

According to a report by KPMG, 11 crore houses will likely be required on a pan-India basis by 2022, with 70 per cent needed in the affordable housing segment.

“About 1.7-2 lakh hectares is required to fulfil urban housing need by 2022,” the report says.

The report states that 70 per cent of the housing needs until 2022 would be concentrated in States such as Uttar Pradesh, Bihar, Maharashtra, West Bengal, Madhya Pradesh, Andhra Pradesh, Telangana, Rajasthan, Tamil Nadu, and Karnataka.

Since real estate is a State subject, State governments need to come out with policies for affordable housing, Neeraj Bansal, Partner and head, Real Estate and Construction, KPMG in India, said, adding that “Affordable housing projects are on thin margins, and hence, clearances need to be faster, taxes and stamp duty need to be rationalised and building bylaws must be revisited. Clarity in land availability, bylaws and approvals are important.”

The macro-economic sentiment is not favourable with little progress in job creation.

Gulam Zia, Executive Director, Advisory, Retail and Hospitality, Knight Frank India, said, “Home buyers need to be secure about their jobs and the overall economy. Moreover, most developers are in distress and are not in a situation to start construction tomorrow. This won’t change in the next one year either.”

It would be better if the government does not remain hung up on the ‘ownership’ element and comes out with a policy on social rental housing as well, Bansal added.

(This article was published on March 6, 2016)