The government’s affordable housing initiative has proven to be uneconomical and has failed to gain traction owing to various issues faced by developers, besides other bottlenecks such as a lack of quality products, said panellists at News Corp VCCircle’s FinServ 2018 summit.

Industry executives gathered at Four Seasons Hotel in Mumbai on Tuesday for the 10th edition of the event, where stakeholders discussed the opportunities and challenges of the financial services sector.

Amit Goenka, managing director (MD) and chief executive officer (CEO) at NiFCO, moderated a panel which took stock of the affordable housing space.

He was joined by Vastu Housing Finance’s founding MD and CEO Sandeep Menon, Indiashelter’s managing director and CEO Anil Mehta, Motilal Oswal Real Estate’s CEO Sharad Mittal, Mirae Asset Global Investments’ real estate head Puneet Bhatia, Quikr Realty CEO Vikram Goel, and Anarock Capital’s MD and CEO Shobhit Agarwal.

The panellists said that while there is a demand for affordable housing, much of the action remains centred around ‘economic housing’ aimed at the lower income group (LIG) population who cannot afford houses in big urban cities. 

At the same time, developers lack scale and size, often leading to higher cost of production and thereby making it unviable for them to enter the space.