Many who till recently offered only flats in the Rs 60-lakh plus range are now offering flats at Rs 25 to 35 lakh. “We are leveraging on land parcels bought at low valuations. People buying affordable homes come from a variety of segments and include first time home buyers,” said Irfan Razack, CMD of Prestige Group.
The company recently launched Prestige Tranquility, a 38-acre residential development off Old Madras Road at Budigere. A studio apartment starts at Rs 20 lakh and a 2 BHK flat measuring 1,100 sft is priced at Rs 27-28 lakh. Brigade Enterprises has launched Brigade Meadows in Kaggalipura village near Kanakapura Road priced between Rs 17-25 lakh. DLF is planning a project on Hosur Road priced at Rs 20-25 lakh. Patel Realty, Woodsville and Confident Group are others prominent brands in the affordable space.
These lower prices are made possible by locating the projects on the city periphery, where land costs are lower, by using land bought many years ago at lower prices, by reducing the apartment sizes, and by using pre-fabrication techniques. Some developers had started such projects in the 2008 slowdown, but then went back to building more expensive homes when the economy revived.
Bangalore is estimated to need 60,000 homes in this affordable category. But some developers feel merely cutting the size of units like they did during the previous slowdown won’t help. “It’s a volume game. Considering the demographics of customers buying into affordable homes, delivery timelines are critical. If the project cost shoots up beyond the sweet spot, it’s no more affordable,” said Jackbastian Nazareth, CEO of Puravankara Projects. The company’s affordable housing arm, Provident Housing, has developed a 44-acre affordable housing project on the Yelahanka-Doddaballapur Main Road.
The buzz around affordable housing is growing stronger as there is resistance to mid sized projects at current price points, said Amit Goenka, national director – capital transactions at property consultancy Knight Frank India. “Considering several rounds of rate hikes, customers are attracted to low priced products and so are investors. Developers are looking at a time-based investment strategy where they are seeking investor money to meet their cash flow requirements,” he added.
Anshul Jain, CEO of global property advisory DTZ India, says the market has softened considerably given the prevailing economic uncertainties.
Developers are betting big on affordable homes as sales in the mid and luxury homes are beginning to stagnate.
BOTTOM OF PYRAMID
Developers who offered flats only in the Rs 60-lakh plus range are now offering flats at Rs 25 to 35 lakh These lower prices are made possible by locating the projects on the city periphery, where land costs are lower Bangalore is estimated to need 60,000 homes in this affordable category