Facilitating easy access to affordable housing

Sagar Pawar, age 32, a resident of Baner in the outskirts of Pune, had moved to Mumbai in 2019 in search for better opportunities as a graphic designer in a mid-sized digital marketing company. Living with his brother Subash in a 400 sq. ft. 1 bedroom hall kitchen in Kandivali in north Mumbai, Sagar had no choice but to compromise on his living space, living out of boxes and using the hall as a sleep space with his wife and 1 year old son.

Compromise in living conditions, had become a way of life for the Pawar couple, till family dynamics changed in 2020 when the pandemic hit the Indian shores. During the first lockdown that commenced from March 2020, it became evident that a 400 sq. ft. house would not suffice for the Pawar brothers. Work from home in a congested place was becoming nearly impossible for Sagar, as his brother, a medical representative was stuck at home with field visits coming to a grinding halt.

This was when the idea of moving back to Baner, this time with a determination to buy his own house began germinating in the mind of Sagar. With work from home having become a way of life, and the acute need for safe and comfortable space, goaded Sagar to take the decision and move back to his hometown Baner, where he has now purchased a 400 sq. ft. one bedroom hall kitchen of his own.

The journey back home

Sagar, is one of the many homebuyers who have taken the plunge to turn homebuyer during the pandemic. There are many like Sagar who have moved back to their hometowns or outside city peripheries in the new normal. While there has been a spurt during the pandemic, the demand emanating from tier II or tier III cities is not entirely new.

Trends in residential sales over the past six years (2014-2019) show that while Tier I cities grew at 28%, tier II cities grew much faster at the rate of 51%. These include cities such as outer Mumbai Metropolitan Region (MMR), Jaipur, Indore, Nashik, Coimbatore, and Chandigarh among others.

Fillip from Government schemes such as Pradhan Mantri Awas Yojana and the need to move to bigger and more spacious living areas have spurred this trend. With remote work or limited travel that has now become the norm, this trend is here to stay.

Digitally empowered consumer

The other trend is the rise in digitisation in the era of the pandemic that has incidentally elevated the homebuying potential for the so called “bottom of the pyramid”. Data released by the Broadcast Audience Research Council (BARC) and Neilson in May 2020 showed that 77% of the urban population and 61% of the rural population were spending time on the internet up to 4 hours daily as compared to 3 in the pre-pandemic times.

Demand from the Bottom of the Pyramid

Easy availability of affordable handsets and internet packs has opened up a whole new virtual world that has made the search for homes and initial research possible for the Lower Income Group (LIG) Middle Income group(MIG) and Economically Weaker Sections (EWS) that together account for 90% of the housing demand and urban areas including the city peripherals.

The government push for realty sector through the credit linked subsidy of PMAY has extended the scope for this segment. Other factors giving a shot in the arm to affordable housing dream are the constitution of Real Estate Regulatory Authority (RERA) that boosts the confidence of consumers and relaxation of GST on under construction homes that has been brought down to 1% from the earlier 8% for affordable housing.

With affordable housing being the buzzword today, there are many property portals that are trying to cater to the LIG, MIG and EWS segment. However, the large inventory listed on such portals makes it difficult for the potential consumer to seek for the homes in their budget. Further, builders who cater specifically to the affordable housing segment, often find it intimidating to list their projects among the big boys among developers.

To fulfill this gap in the market, companies like Agrim Housing Finance have embarked upon the launch of Apna Ghar Khoj (www.apnagharkhoj.com), that is India’s first and exclusive property search portal dedicated to affordable housing projects in the range of Rs 5-50 lakhs.

(The author is CEO and co-founder of Agrim Housing Finance; views expressed are personal)