PUNE: Builders and developers largely building the value and premium segment have started to move towards affordable homes -a sub-segment where there is a massive unfulfilled demand. This move by builders has begun to translate into smaller-sized units on the outskirts of the city.
“There is a definite shift to this segment. Some of our members are focusing on the affordable housing segment and this trend is driven by demand and the government’s push to address the shortage here,“ said Shantilal Kataria, president, Confederation of Real Estate Developers’ Associations of India (Credai), Pune. Credai recently handed over a draft of an affordable housing policy to Maharashtra chief minister Devendra Fadnavis. The state government will soon come up with it’s own policy.
To meet the Prime Minister’s `housing for all’ vision by 2022, the centre has announced a credit linked subsidy scheme where the first Rs 6 lakh of loan amount will be priced at 6.5% (normal prevailing rate is over 9.20%), provided the borrower meets certain criteria. The demand has always been there in this segment. It is estimated that there is a shortage of 18-20 million units for the low and middle income groups across the country. Housing units measuring not more than 323 sq ft and 646 sq ft (in carpet area) are considered ‘affordable’ in metro and non-metro areas, respectively.
A shortage of over 2 lakh affordable housing units has been estimated in Pune and only a fraction of that demand is being met. “The demand is 5-6 times of what is being built,“ said Kataria. Established developers now agree that it was a mistake to not touch the affordable segment for so long. Lower demand in the value, luxury and premium segments have also driven the growing interest in the affordable housing segment.
“It is a reasonably profitable segment if you stay invested in it for a long time. Somehow we were unable to match the price and the product,“ said Hemant Naiknavare, director, Naiknavare Developers. The company has launched an 8,000 unit project in Chakan 1,500 of which will be completed in the next two years. “Smaller units in far off areas with appropriate number of rooms is the new trend that is here to stay,“ said Naiknavare. “I will be happy if we can deliver in excess of 30,000 units in this segment by 2022,“ he said.
Also, builders are doing away with frills like swimming pools, tennis courts and gymnasiums to keep the cost of projects down.
“All of us went into this overdrive of providing way too many amenities and later realised not many were using it,“ said a builder who now focusses more on the affordable segment. “This segment needs more functional homes and land is available only on the outskirts. The government must facilitate faster connectivity to city centres,“ he said.
Credits ET Realty