HOUSING ANALYSIS

Submitted by:
Shruthi Thakkar (present)
Ganesh (present)
John Israel
Adhreja

HOUSING
MARKET ANALYSIS
Studies that Focus on the Market
Analysis of Local Economic Conditions
Study of the fundamental determinates of the demand for all
real estate in the market

Market Analysis

Study of the demand for a particular property type

A site in search of a Use
A Use in Search of a Site

REAL ESTATE
MARKET ANALYSIS
Studies That Focus on Individual Decisions
Feasibility Analysis
Evaluates a specific project as to whether or not it is
likely to be carried out successfully

Investment Analysis

Evaluates a specific property as a potential investment.

Investor specific.

OVERVIEW OF MARKET ANALYSIS

COMPONENTS
The Study Process
1. What attributes does the subject property offer to the
market?
2. Who are the potential, typical users/most likely
purchasers of the subject?

Most Probable Buyer Analysis

OVERVIEW OF MARKET ANALYSIS

COMPONENTS
3. Is the property use needed?

Demand Analysis
Population Households Housing Units

Income Effective Buying Power Retail Sq. Ft.

Jobs % Use Office Office Sq. Ft.

Jobs % Use Industrial Industrial Sq. Ft.

OVERVIEW OF MARKET ANALYSIS

COMPONENTS
4. What is the Competition?

Supply Analysis
5. Analysis comparing demand and supply

Equilibrium Analysis
How much rent can be charges?
Is the location competitive?
Are the property attributes competitive?
How much of the demand can be captured?

OVERVIEW OF MARKET ANALYSIS

COMPONENTS
6. Subjects marketability

Capture Analysis

7. Does the subject make financial sense?

Is it a good investment?
What is its market value?
Is the propertys value more than its cost?
I.e.: is there any entrepreneurial reward for the risk?

Feasibility Analysis and/or Highest and Best Use

OBSOLESCENCE AND
DEPRECIATION FACTORS

OBSOLESCENCE AND DEPRECIATION

1. The value of an asset is the sum of discounted rentals expected over the remaining
life of the asset.

2. The life of an asset is determined by two factors:

a. the asset can wear out through use and the quantity of service delivered becomes
and remains zero.

b. the price of the service delivered becomes and remains zero because of reduced
demand.

3. When either of these two factors results in a return which does not justify the costs of
retaining the asset, the owner may decide to retire the asset before the absolute zero
rental value position is reached.

4. This combination of the wearing out of the asset and reduced demand resulting in
lower rental price for a reduced quantity of service, results in lower asset value and this
reduction is called depreciation.

OBSOLESCENCE AND DEPRECIATION

5. The wearing out of an asset is a function of its previous use, and we can take its age
as a reasonable proxy for this, assuming continuing use in each period of its life so far.
We can describe the reduction in quantity of service provided through an age
efficiency chart. In broad terms, the older the asset, the less quantity of services
provided in a period.

6. The reduction in price of the service is a function of how demand for the service
varies with time. The price is not a function of previous use reflected in its age, but
purely reflects how the demand for this service has changed.

10

This reduction in demand over time, reflected in the reducing price, is what commonly
known as obsolescence.

HOUSING DENSITY & DESIGN

WHAT IS HOUSING
DENSITY?
Housing density or residential density refers to the number
of homes per unit of land. It is typically reported in dwelling
units per acre (or du/ac).

HOUSING DENSITY
THE AMOUNT OF HOUSING IN A GIVEN AREA

Density is used in planning for new residential development

to measure the amount of new housing to go on land.
Government policy requires local planning authorities to plan
for new housing to be at a density no lower than 30-50
dwellings per hectare.

Getting density too low leads to, feelings of

isolation,car dependency can undermine
the viability of public transport.

Badly designed high density housing

can make a development feel
cramped,
oppressive
overcrowded,
lead to a sea of cars.

HOUSING
AFFORDABILITY

Lack of affordable housing is a crisis for both communities &

individual households
For communitiesattracting & keeping employment opportunities;
quality neighborhoods
For householdsself-sufficiency, stability & improves life outcomes
for children

WHEN IS HOUSING
AFFORDABLE?
A household should spend no more than 30% of its total
income on housing costs, including mortgage or rent
payments & utilities
More than 30%: housing cost burdened

More than 50%: severely housing cost burdened

Variety of housing affordability indices exist

Factors influencing affordability:

Income level
Household size
Geographic variation
Affordability is tied to a particular geographic areas median
household income & median housing costs

AFFORDABLE HOUSING IN INDIA

Urbanisation and Housing Shortage in India.
As per 2011 census, the country had a population of
1,210.98 million, out of which, 377.10 million (31.16%) lived
in urban areas.
This growing concentration of people in urban areas has led
to problems of land shortage, housing shortfall and
congested transit and has also severely stressed the
existing basic amenities such as water, power and open
spaces of the towns and cities.

AFFORDABLE HOUSING IN INDIA

ESTIMATED CONSTRUCTION COSTS FOR LOW-INCOME

HOUSING

INFERENCE:for one sq ft ,the selling price will be Rs 1,400 to 1,700.

GOVERNMENT POLICIES
ON LOW INCOME
HOUSING

Urban Housing Scenario in India

URBANIZATION

Indian urban population in 2001 was

27.8% of the total population.
Over 5 decades, annual growth of
urban population ranged between
2.7 to 3.8%. During last decade it
increased at annual rate of 2.7%.
The process of urbanisation is
marked by increasing concerntration
in larger cities.
It is projected that by 2041, Indias
urban population will be 50%.
The current ratio of urban land to
population to GDP is 3:30:60. By
2040 it will be 3: 50: ?

Quality of Housing Stock

47.49

50

Pucca

45

Semi-Pucca
Kutcha

40

No of Houses (in Million)

41.17

35

29.79

30
25

18.09

20
15
10
5

11.8
4.35
2.35

6.8
3.11

6.21
3.3

8.08
2.7

9.16
2.18

1971
(18.5)

1981
(28)

1991
(39.3)
Year

The figure in Parenthesis is the total housing stock (in Million)

* Source:

Technical Group on Estimation of Urban

Housing Shortage, NBO, MoHUPA

2001
(52.06)

2007 *
(58.83)

Growth of Slums
61.8
46

28

90% belong to informal sector with no

assurance of a steady income.

RAJIV AWAS YOJANA

Pursuance to the announcement made in the

address of the President of India to the Joint

Session of Parliament
on 4.6.2009
considerable exercise is going on in the
Ministry in consultation with Planning
Commission for launching Rajiv Awas Yojna
aimed at Slum Free India based on whole
city approach.

WAY FORWARD
Central Government
JNNURM and social housing to be given stronger boost
with reform emphasis, additional funds and new
components

State Governments
State Housing Board to be reactivated with definite
purpose and definite targets.
Land to be provided at nominal cost for economically
weaker sections and controlled prices for LIG and MIG
Cooperative Societies to be encouraged

Effective partnership between Govt. and private sector in

the form of earmarking of land for EWS/LIG

CONCLUSION
Historically, housing for the poor and the economically weaker sections
of the society ( EWS) has been provided by the government under
various welfare schemes.
The main reasons for rise in shortage in affordable housing on the
supply side is lack of availability of urban land, rising construction costs
and regulatory issues while lack of access to home finance for low
income groups are constraints on the demand side.