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Demand up for affordable houses in Coimbatore
The Hindu  |  February 27, 2020

M Soundariya Preetha   Coimbatore

 

Houses that are priced between Rs  25 lakh and Rs  30 lakh and located in the city or in the fringe areas have good demand

 

Residential units that are relatively smaller in size, come with basic facilities and priced below Rs 30 lakh seem to be getting a better traction in the city and on its outskirts.

 

Affordable housing is a segment that has only a few promoters developing such projects in the city. However, the projects that are launched in this segment are said to be seeing good demand that is growing too.

 

According to JLL India, apartments or independent houses that are priced between Rs  25 lakh and Rs  30 lakh and located in the city or in the fringe areas have good demand. It is a volume business and most of the projects are located on the outskirts so that land cost is affordable to the promoters. Further, raw material transport should be cost-effective. The demand for these houses is not only from the city, but also from Tiruppur, Karur, and Erode. Those who have shifted to Coimbatore for work and want to buy a house look at this segment. There are also a number of small independent houses that are coming up in the areas just outside the city limits. This is a demand driven market, says a JLL representative.

 

The Pradhan Mantri Awas Yojana supports those who want to buy an affordable housing by providing credit linked interest subsidy. Awareness about the scheme and how to get the support should improve, the representative adds.

 

Rajesh B. Lund, head of the environment committee of Confederation of Real Estate Developers Associations of India (CREDAI), says Chennai and Coimbatore have a few projects in this segment. The main raw material for the housing projects is land and it should be at an affordable price. The CREDAI has been appealing to the government to increase the size of the houses to 60 sq.mt. carpet area for the Economically Weaker Section (EWS) and 90 sq.mt. for the Low Income Group (LIG). This will enable more promoters to get into the segment.

 

Builders Association of India Coimbatore centre head V. Sivarajan says there are several small residential units that have come up on the outskirts of the city and these are all less than 900 sq.ft area. The cost is also less than Rs  35 lakh. Several builders are into this project in the recent years. The PMAY scheme is helpful to beneficiaries who want to buy a house and are eligible. It is more of a support. The market itself is huge for the affordable housing segment, he says.

 

District Lead Bank Manager S. Venkataramanan says that outstanding housing loan amount given by banks in the district as on December 31, 2018 was Rs  4,737 crore and it was Rs  4,892 crore as on December 31. 2019. Loans given for affordable houses are not monitored separately. But individual banks take steps to extend loans for affordable houses. Credit extended under the Pradhan Mantri Awas Yojana is only for beneficiaries in the EWS or LIG segments. They need to get certificates from the officials concerned to benefit from the scheme. So far, there is no complaint about loans extended under the scheme in the district.

 

RR Housing has done four to five affordable housing projects in the city and the response is good, says its managing director R. Karanaboopathy. The demand is for two bed room houses within the city. “We cut on the size and not on quality,” he says. Most of the buyers are first time home owners and buy it for self-occupancy, he says. About the challenges in affordable housing, Mr. Karanaboopathy says the home buyers may have taken bank loans for other purposes, some may have defaulted on repayments too. So, rejection of applications for loans under this segment is almost 40 %. The buyers face a lot of challenges and hence the risk is high.