Affordable housing demand still strong

The demand for affordable housing in and around Kolkata remains strong post-pandemic, even as the entire gamut of real estate products experience a bounce-back. In fact, along with Ahmedabad and Pune, Kolkata is one of the most affordable housing markets in the country according to a recent study, with average EMI outgo accounting for 23-26 per cent of a household’s monthly income.



There are several factors responsible for the perennial affordability in the city’s realty market. Kolkata is not only a stable market, it is also largely driven by end-users, not speculators, unlike a Mumbai or a Gurgaon. Besides, a host of new growth corridors have opened up for the property market thanks to growing investment in better infrastructure and connectivity.

Some of these new affordable pockets include the Southern Bypass corridor/Sonarpur-Narendrapur, Rajarhat, New Town, BT Road, Madhyamgram, Diamond Harbour Road/Joka, while new growth areas are sprouting all across. The augmented Metro connectivity and new roads with support infrastructure have been driving this growth of affordable housing on the city’s fringes.



The government has also helped to create traction in the affordable housing segment by launching a clutch of consumer-friendly schemes in its ‘Housing for All’ initiative. Certain steps like raising the tax deduction limit for interest payment on home loans, whittling down GST rates and giving industry status to affordable housing have all added energy to this market and of late, with more and more home seekers taking the plunge. Another report points to the fact that average property prices in Kolkata have gone up by nearly 46 per cent over the past decade, a clear indication of a stable market where frequent fluctuations don’t send shivers down your spine. While there has been a perceptible rise in demand for premium projects after the pandemic, maximum sales are still recorded in the Rs 40 lakh-to-80 lakh segment.



While NRIs have traditionally looked at the Indian real estate market as a good investment option, they are now looking at the affordable property segment seriously. For one, they can leverage the government’s schemes on investing in affordable housing and reap the benefits of tax cuts and interest subsidies. Besides, with demand remaining strong, investment in this segment holds out the prospects of a steady rental income and capital appreciation. Also, this market is less prone to fluctuations and hence, offers greater peace of mind.

So, in terms of both risk reduction and profit maximization, the affordable housing segment offers a wonderful avenue for diversification of their investment portfolios to the NRIs. With more stocks being added to the inventory of most developers, the options are opening up even more.