Huge gap between Surat’s realty and reality
Surat’s real estate developers are struggling hard to find buyers from the Higher Income Group (HIG) and Higher Middle Income Group (HMIG) as the inventory pile on. The state government on the other hand is focusing on housing schemes for urban poor. Figures of Surat Builders Association (SBA) show that as many as one lakh 3-BHK houses with an area of 1,500-1,600 sq feet priced above Rs 40-45 lakh are lying vacant in the city
The builder’s body is of the view that with the increasing middle class population, at least three lakh families in the city in middle income (MIG) and low-income group (LIG) need to be housed. The huge contrast in the two situations shows a gap in the real estate development in the area and the ground situation.
Certain areas of the city that are not much developed like Vesu, Parle Point, New City Light, City Light and Piplod have houses in the range of 1,500 sq feet and above. Any middle-class family that wants to buy a flat of 1,200 sq feet priced less than Rs 35 lakh will move towards developing areas like Parvat or Puna or go up to Pal .
President of SBA, Mr. Velji Sheta says on the situation, “It is not that builders have not developed LIG and MIG housing. But it is not affordable for builders and there is no financial viability.” He further added, “Moreover, there is a trend of buying houses for investment. Many go for bigger houses anticipating appreciation and profit by selling them in the future.”
Speaking on the LIG and MIG segments, Mr. B R Balachandran, a Bangalore based urban planner who had also worked on affordable housing concept in cities of Ahmedabad and Surat said, “For LIG and MIG, the single biggest stumbling blocks is housing finance. The buyers don’t have required papers to get loans and they don’t even have cash.” He further added to his comment, “However, in the last few years, companies like Micro Finance Corporation have come up that give loan to this segment. But the volume of housing finance is still very small,” he added.
Mr. Balachandran also cited the example of Rajasthan, where the state government developed a large number of affordable houses but could not dispose them in a correct manner due to lack of finance options. Surat is facing the same issue, he said.
Source: The Times of India
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