With one of the largest aggregated base of the pyramid populations and wealth gaps on the planet, Indian housing provision remains in a dire state. A distinct lack of supply side solutions has further exacerbated a massive real estate price spike in recent years and, whilst both the private and public sector often announce their intention to initiate affordable housing projects, actionable steps are rarely taken. As in many developing / emerging world cities with rapidly expanding low income housing deficits, India's inertia is largely attributed to the low project financial viability in what is widely viewed as a high risk investment fuelled by wider factors such as rising inflationary pressures on core inputs, procurement bottlenecks, corruption and political discrimination to name a handful of the core issues.

To make matters worse, accessibility to housing in even the peripheral areas of Indian cities has moved beyond the realms of the base of the pyramid demographic. To demonstrate, we have produced an info-graphic based on tracking through Indian property portals which advertised stock available at 6 lakhs and under (600,000 rupees / $US 11,700), namely: 99 Acres, Magic Bricks, Property Wala, Makaan and Real Estate India. We subsequently took average monthly minimum wages from the 10 Indian sample cities (via the Indian PayCheck site) and based gross household monthly earnings on two adults working full time, 5 days a week. The monthly hypothetical repayment mortgage calculation was undertaken using the Indian Property Loans online simulator - based on a 70 percent loan to value ratio, the current Indian State Bank interest rate of 10.75 percent and a term of 25 years. Our definition of affordability is based on the mortgage payment being close to one third of the household's gross income - whether this should be more or less is of course open to debate and dependent on particular regions but we find it is often a common rule of thought in the global real estate sector. Note that there are also other considerations and assumptions to consider which we have outlined at the bottom. Despite what seem potentially interesting regions such as Delhi, from this broad based research (that we would like to expand on an ongoing basis), it can be concluded that the Indian low income home buyer is both more out priced and distant from the sector than ever before.

Article supplied by Ruban Selvanayagam www.habitationfortheplanet.org

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