The hub of employment and commercial activity across States has been traditionally in the central business district areas and the development of prime housing projects mostly takes place around these urban centres. The price band of these housing properties varies depending on their proximity to the central business area. While the closer ones attract higher prices due to reasons, including the higher cost of the land, better infrastructure and easy to travel factors, it decreases with the distance, making it more "affordable & attractive” for the masses.
These affordable housing pockets have innately existed at a distance from the prime areas of a city and essentially exist in sub-urban areas and it gets further extended gradually along with the expansion of urbanisation.
Urbanisation growth over the last 2-3 decades has increased from over 25 percent to around 35 percent and is expected to grow to over 40 percent by the end of this decade. As the urban areas expand and the suburban areas in closer proximity get absorbed within, the existing affordable pockets tend to contract/shrink and the subsequent affordable pockets then usually come-up in newer suburbs as well.
It is estimated that by 2030, India shall be home to over 75 cities having a population of at least a million. With the prevailing rate of urbanisation, the country has also witnessed more people migrating from small towns and rural areas to the urban centres as well as the newly urbanised suburbs for employment. This leads to increased demand for housing and the affordable dwelling units will keep coming up in the further extended suburbs.
Over the years, with the improvement in infrastructure, the suburban regions have also witnessed much faster growth. The market trend is also reflected in more launches of affordable housing projects by private builders and developers in various upcoming cities across states. Maharashtra leads the pack with 31 percent contribution to such growth followed by Karnataka, Telangana, Tamil Nadu, Uttar Pradesh, Gujarat and Haryana.
Since historic times, affordable pockets have co-existed around prime properties. However, the quality of life and size of an affordable property in sub-urban areas is now becoming comparatively better than those existing in the close proximity of a city. As consumers strive to improve their quality of living, the sub-urban region’s spacious but affordable projects have become more attractive.
With the recent push in connectivity and public transport in the suburbs, especially around the metros and tier-1 cities, supplemented by government policies for promoting affordable projects with various incentives, there is a reverse movement and willingness of people to move from the crowd of the city to these sub-urban pockets.
A considerable share of such housing demand has been financed and supported by Banks and Housing Finance Companies with a 68:32 ratio.
Since the overall economy is now bouncing back post Pandemic, there has been an uptick in people migration to cities and business centres once again. Also with employers doing away with work-from-home models and adopting hybrid or work-from-office models, a sizeable working population has started moving back to the urban centres. With the disposable income again going up to the pre-pandemic level or may be higher, it is only imperative that the affordable housing segment in the sub-urban areas is bound for a northward ride and that too for a long duration.
—The author Dr Rashmi Saluja is Executive Chairperson, Religare Enterprises. The views expressed in the article are personal.
(Edited by : CH Unnikrishnan)
First Published: Dec 19, 2022 7:38 AM IST
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