WHAT IS THE MEANING OF “AFFORDABLE” FOR HOME BUYERS IN PATNA?

A  survey conducted by our company  on 100 flats’ buyers in Patna found that two out of every three homebuyer  in Patna  sank in more than 50% of his total savings into the down-payment itself for purchase of flat in Patna. Flats as investment vehicle is never attractive in Patna as rental yields are very low in Patna and property prices in Patna are elevated in many localities. The ‘ideal flat in Patna’ should provide the convenience without the compromises, be affordable and have great resale value. Since this is an elusive dream, home-buyers in Patna should focus on one or two items on their wish-list. It is important to find a good middle-ground between utility and affordability while buying property in Patna. 

For a middle class resident of Patna, AFFORDABLE means property in Patna under the Rs 50 lakhs bracket.  Because the AFFORDABILITY measure = Ratio of EMI to Monthly income. A middle class family in Patna earns around Rs 75000/- monthly income (earning of family) and at most can afford only 40% of the monthly income as EMI for home loan. That is about Rs. 30000. It makes him eligible for a loan of about Rs.30 lakhs for twenty years. So with 10-15 Lakhs of saving, he can go for a flat priced around Rs 45-50 Lakhs.

To truly tap into this demand, builders in Patna would need to find a way to offer quality, basic amenities and proximity to the city but at these relatively lower costs. This is a challenge developers in Patna will have to face if they want to ride the next wave that is affordable housing in Patna.

Without doubt, maximum affordability lies in the sub-50 lakhs segment in Patna real estate. Moreover, the government is giving sops for affordable housing, which is a big incentive for buyers as well as developers in Patna.

Will the sun finally rise on the affordable housing segment in Patna real estate?