Saturday, July 25, 2009

Deepak Parekh, Chairman, HDFC on “Affordable housing"

The real agenda for affordable housing has still not been brought to the table!


In his recent letter to shareholders, Deepak Parekh, Chairman, Housing Development Finance Corporation (HDFC) said: "Affordable housing is not about box-sized, budget homes in far-flung places where there is no connectivity to workplaces and little surrounding infrastructure.

Affordable housing has to be able to cut across all income segments and has to make economic sense in terms of proximity to the workplace.

The agenda for affordable housing requires combined public-private collaboration and a strong political will to enforce change.”

According to Mr Parekh, “Developers have recognised that the real demand no longer lies in the premium segment and are, therefore, opting to build smaller, no frills apartments.” But this is a bit of a misnomer. Some correction in prices has happened; developer margins have come off; but real estate prices are still high, he added.

“Developers are now reintroducing one-bedroom apartments which seemed to have disappeared from the market. Further, with interest rate reductions, many who were earlier out-priced are now able to come back into the housing market. While these developments are positive, the real agenda for affordable housing has still not been brought to the table."

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