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 house holds 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 Sone pat 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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