The economic slowdown has had one positive effect: Builders are waking up to the fortune in the middle of the realty pyramid.
As the housing boom sent prices skyrocketing, few houses remained affordable. Now, with sales hitting rock-bottom, builders have lined up over 200 ‘affordable housing’ projects.
Such houses cost as little as Rs 2 lakh and go up to Rs 40 lakh. Not surprisingly, most of them are located on the outskirts of the city where land is cheaper.
Zubin Mehta, CEO of the Maharashtra Chamber of Housing Industry, said the idea was to make houses affordable to all sections of society. “Whether it’s a peon or an executive, we now have houses for all budgets,” he said.
Tanaji Malasure City at Karjat has flats starting at Rs 2 lakh, while Acme Group has 1 BHK flats at Andheri for Rs 40 lakh.
The preferred locations for such houses are Virar, Thane, Neral, Vasai and Palghar.
Some realty experts said the builders’ hand was forced by market conditions. “Builders are facing a liquidity crisis and are desperate for money,” said Ajay Chaturvedi, CEO, Accommodation Times, a fortnightly magazine that tracks the realty market. “During the boom, builders raised prices astronomically, putting homes beyond the reach of the common man. Today, they talk of affordable houses.”
Builders have once again started building 1 BHK flats measuring approximately 350 sq ft, which were discarded in the last few years. And, in the last two months, they’ve been getting a good response.
The Lodha Group, for instance, which specialises in luxury housing, has branched into affordable housing at Thane. Its Casa Univas is priced at Rs 2,997 per sq ft; both the 1 BHK and 3 BHK units were sold out within 15 days of the launch. Haware builders, which is building Haware Citi at Thane, had a similar experience. Its flats were priced at Rs 2,600 per sq ft.
Chaturvedi warned of two problems with such houses: there is no guarantee when such projects would be completed and there is a lack of corresponding infrastructure in the areas where they are located. “These areas are underdeveloped and suffer from potholed roads, erratic water supply and power disruptions,” he said.
Some builders are combining their affordable offerings with a financial sweetener. Nirman Group, for instance, is offering 1 BKH flats at Neral for Rs 3.99 lakh. Buyers have to pay a mere Rs 11,000 at the time of booking and Rs 89,000 on getting possession of the flat. After that, they would have to pay Rs 3,000 every month for 10 years or Rs 10,000 per month for 30 months. Haware builders has started an introductory price of Rs 2,600 per sq ft if the flat is booked between January 9 and 19. This offer is valid only for the first 450 flats to be sold.