When the economic slowdown began to tighten its hold on a majority of the country's industires the buzzword was 'affordable'. Builders in the city began to believe that small and affordable homes were what would now be on the wish list of prospective buyers who now had a considerably lower purchasing power. Adding to this was the already-existing EWS (Economically Weaker Section) segment that was already in need of small and affordable residential property in Chennai.
Affordable property in Chennai seemed became the need of the hour and builders had to deliver. The rising price of land and cost of construction materials and the fact that nearly one-third of the price of every property is paid to the government in the form of taxes and levies. To provide an affordable dream housing for all have undoubtedly played spoilsport.
The huge demand exists for an affordable homes that has not changed when the economy was going strong. Land availability and Government to impose the biggest spoiltsport in the delay of providing affordable housing for all. Chennai is expanding rapidly and with a little infrastructure development, places like Chengalpet could well become part of a new Chennai.
The government does its bit by providing some relief to developers and buyers as far as property go, they don't quite see much drift being made in the affordable housing segment.
What exactly are these levies? These are Stamp Duty, Service Tax and VAT (Value-Added Tax) together make a contribution of roughly 36% of the cost of a residential property of Chennai.
Rising price of land and cost of construction, the government will also do well to provide priority status for approvals of affordable housing or even develop a pre-approval system for housing projects so that developers needn't wait unendingly for approvals. Real Estate in Chennai is driven in direct proportion to the IT/ITes sector. If affordable housing activity is directed in proportion to the automobile segment that has established itself on GST as opposed to OMR then you likely to develop infrastructure in under-developed localities and affordable housing will thus become all the more easier.
In Chennai one of the challenges in affordable housing is sustaining quality which can be addressed by ensuring that the family and community is part of the process. Affordable Property is requires a socio-economic paradigm very similar to providing accessibility to education for all. Housing is a basic need and several forms of housing could be explored like core houses that grow, incremental housing, renew existing houses, rental housing or cross-subsidisation.
It is however clear that affordable housing can only happen through a strong patnership between the public and private sectors.