The company plans to build these homes over the next five years to support the government’s stated goal of Housing for All by 2022.
“Our goal is to build a total of 1 lakh of affordable homes over the next five years. This would result in a cost of Rs 10,000 crore, which will be shared among all stakeholders, ”NBCC President Anoop Kumar Mittal told ET. “Some of these projects would start this same year. ”
These affordable housing projects would offer residential apartments with prices ranging from Rs 10 lakh to Rs 50 lakh to Rs 60 lakh depending on the location of the project. NBCC is expected to achieve a profit margin of around 8-10% from these projects.
The NBCC itself owns over 200 acres of land plots across the country in cities like Alwar, Jaipur, Faridabad, Kochi, Patna, Kolkata, Bhubaneswar and Coimbatore which would be used to build these houses outside of the lands allocated by the government.
In addition to this, the company has entered into discussions with many of the 25 public sector companies to execute such affordable housing projects on their surplus land plots in places such as Delhi, Gurgaon, Pune, Hyderabad, Nainital and Raigadh. near Mumbai.
“We have not yet signed an agreement with public sector companies for plots of land. But we have engaged in several discussions, which will soon yield results, ”said Mittal.
The deal to be made with public sector companies for their land would involve some commercial development that can support the construction of affordable housing there and make it financially feasible. The excess money generated by these projects would be returned to the PSUs and they would be able to obtain compensation equivalent to at least the circular rate applicable there.
Affordable housing has caught the attention of real estate developers and financiers in recent quarters and the pace of development is accelerating. The government’s decision to grant infrastructure status to affordable housing in the 2017 Union budget has significantly rejuvenated interest in this segment. This decision allows the developers of these projects to access institutional funding on better terms.
The government’s efforts to increase the supply of affordable housing by offering tax incentives and assistance to real estate developers have now started to bear fruit. More developers and bigger brands, hitherto known for their premium projects, have also made a foray into this segment, as existing players step up their plans. This is evident from the remarkable increase in the number of affordable housing projects that have been launched over the past year.
There is a gap of around 18 million urban housing units in the low and middle income category by 2022 in Tier 1, 2 and 3 cities across the country, according to various estimates.