ECONOMYNEXT – Affordable housing doesn’t attract investor interest, regional analysts of the real estate and housing sector said at a forum in Colombo.
“Most of the realtors and suppliers are interested in building houses for the middle income and higher income group because the profit margin is high,” Senior Associate of the Center for Public Policy Research, Anu Anna Jo, said in her discussion on the Indian market.
“When it comes to affordable housing, the profit margin is 7-8 percent which is comparatively minimal.”
Experts from South Asia’s housing industry met on Wednesday (13) to discuss anti-competitive practices in the region at a forum on ‘Housing for all: The role of competition policy in construction’ organized by Advocata.
“There is an unwritten agreement among land owners that the prices of land will not drop beyond a certain point,” South Asia Network on Economic Modelling Research Associate, Omar Chowdry, said in his introduction of the Bangladesh housing market.
“They would not inflate it too high. They would keep it at a range where it is profitable for them.”
Chowdry said that the difficulty of new entrants entering the housing market is a reason for the regional housing crisis.
In 2015, the Indian government launched the Pradhan Mantri Awas Yojana scheme which aimed to provide affordable housing by 2022.
“The major problem was that the houses that were constructed were in the outskirts,” Jo said. “One of the major costs that is associated with housing is the cost of land.” (Colombo/Dec15/2023)