Tuesday, July 27, 2010

>Affordable Housing – A key growth driver in the real estate sector?

“Affordability” as a concept is very generic and could have different meanings for different people based on differences in income levels.

Affordable housing refers to any housing that meets some form of affordability 1 criterion .
Different countries have defined affordable housing to present the economic potential of an individual buying a house. In the United States and Canada, a commonly accepted guideline for affordable housing is that the cost of housing should not be more than 30 percent of a household's gross vary with regions and income levels.

Another point to note is that the definition of affordable housing is not just restricted to the three categories mentioned above, but applies to people across the country. Affordable housing can be defined using three key parameters viz. income level, size of dwelling unit and affordability. While the first two parameters are independent of each other, the third parameter is correlated
income. Housing costs here include taxes and insurance for owners, and utility costs. If the monthly carrying costs of a home exceed 30–35 percent of household income, the housing is considered 2 unaffordable for that household .

Defining affordable housing in India is a difficult task given that at every square kilometer of the country, the dynamics of the market are different. At KPMG and CREDAI, we have therefore broadly defined affordable housing in India for Tier I, II and III cities based on three key parameter

To read the full report: HOUSING SECTOR