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For an industry that’s in the throes of an acute recession, the demand for affordable housing could not have come at a better time. Small wonder then most developers regardless of their size or reputation are now making a dash to provide ‘affordable homes’ in a market where the customer is clearly the king. Rajesh Kulkarni checks out the prices on offer.
The ongoing slump in demand for luxury and premium residential projects has forced developers across the country to return to a segment that was thought to be long forgotten. Affordable housing or homes that cater to the mid-income group, by far the largest category of end users today, are making a huge comeback, and how.
The once buoyant Pune market is witnessing a supply of 1BHK apartments making a comeback, with about 10,000 such ‘compact’ units measuring 500-700 sq ft priced between Rs15 and Rs20 lakhs, expected to come into the market over the next one year. The overriding reason being the unprecedented rise in property prices over the last three years that has put 2 & 3BHK apartments beyond the reach of potential buyers.
The Orissa chapter of the Confederation of Real Estate Developers Association of India (CREDAI) has decided to cut prices of its upcoming housing projects by 5-10% over the next two months following a fall in prices of key raw materials. The move comes in the wake of a call given by CREDAI advising members to cut prices to revive demand.
Following the price cut, residential real estate projects in the city will come down to Rs2,200-Rs2,400 psf as against the prevailing rates of around Rs2,500 psf.
Down South, Bengaluru is facing the brunt of falling demand with an estimated 450 flats on the city’s outskirts finding no takers in spite of frenzied promotional campaigns. The city is now turning its attention to housing projects targetting the middle-class. According to industry sources, several small builders have firmed up plans in this direction, while bigger players are expected to follow suit.
A systemic solution
A clear reflection of this trend was seen at a recent housing expo organised by the Builders Association of Navi Mumbai (BANM) where the spotlight was on affordable housing projects. “People are looking at buying homes at realistic prices,” says Nalin Sharma, president, BANM. The expo had on offer properties priced from Rs10-18 lakhs at upcoming Navi Mumbai suburbs like Ulwe, Roadpali, Kharghar, Kalamboli and Panvel.
Mumbai-based Matheran Realty’s project, Tanaji Malusare City (TMC) at Karjat, the country’s first and largest township dedicated to social housing offering quality homes priced between Rs 3-7 lakhs is already eliciting a positive response. The company witnessed nearly 66,000 aspirants applying for 3,000 apartments to be handed over in mid-2009. “There is no dearth of demand for homes in the under Rs10 lakh category whether it is boom or recession or the huge demand-supply mismatch,” says Pravin Banavalikar, CEO, TMC.
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Buoyed by this, the company has announced a rental housing programme in tandem with the Mumbai Metropolitan Region Development Authority (MMRDA) wherein TMC will provide 6,000 homes free-of-cost to MMRDA in exchange for higher FSI and off-site infrastructural support such as municipal, roads, electricity and water infrastructure.
Company sources say beneficiaries of the housing scheme will be given a 160 sq ft residential unit on a leave-and-license basis for a period to be decided by MMRDA who will determine the monthly charges. As part of its promised infrastructural support, MMRDA will create a growth centre at Karjat in addition to building a six-lane road and municipal infrastructure.
With premium projects finding few takers, it comes as no surprise that the country’s top builders are focussing on affordable projects to raise some much-needed funds. Mumbai-based Lodha Group, known for its premium and super premium segments, has launched CASA, its new value sub-brand that targets buyers from the middle-income group.
“This brand will cater to the needs of the mobile, aspirational middle-class while ensuring security, comfort and value for money,” says Abhisheck Lodha, director, Lodha Group. The company has announced CASA-Univis, its inaugural project in this category. Centrally located at Ghodbunder road, Thane, this 55-acre project offers a choice between 2- and 3BHK configurations across 26 towers at an invitation price of Rs2997 psf. For Lodha, this project is an answer to rapidly changing dynamics of the realty market.
He says: “People are looking for value propositions and we intend to give them that, without compromising on the comfort aspects. According to our estimates about 70% of the property market will be driven by the affordable project segment soon.” In line with this, the company plans to invest about Rs500-700 crore in the development of Casa brand over the next 12 months.
Pune-based Avinash Bhosale group (ABIL) is also considering similar projects. “We have identified pockets in and around the city that offer easy accessibility to public transport facilities and industrial work areas where we are in the process of planning low-cost housing schemes,” says Sudhanshu Purohit, the company’s CEO.
Buoyed by an encouraging response, DLF too has announced to invest Rs15,000 crore over the next three years in the development of residential projects priced between Rs15 and Rs40 lakh. According to A Harikesh, vice president, DLF Home Developers, the wholly-owned subsidiary of DLF, the company will develop about 40,000 units measuring between 1,000 and 1,800 sq ft. “Mid-income homes will be a strong focus area for us and will see strong growth.” DLF has witnessed tremendous response for its mid-income projects at Bangalore, Gurgaon, Hyderabad, Indore, Kochi, Kolkata and Pune, which have sold over 7,000 units thus far. The company is in the process of launching more projects in Chandigarh, Jalandhar, Ambala, Goa and Lucknow within six months.
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