Luxury housing hits supply of low-end homes

The rapid mushrooming of luxury homes in the city seems to have created havoc in the residential real estate market. A report published by real estate research firm Cushman and Wakefield (C&W) has pointed out that against the projected demand of 8.30 lakh affordable houses in 2014, the city will get just 2.5 lakh units.

The rapid mushrooming of luxury homes in the city seems to have created havoc in the residential real estate market. A report published by real estate research firm Cushman and Wakefield (C&W) has pointed out that against the projected demand of 8.30 lakh affordable houses in 2014, the city will get just 2.5 lakh units.

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Speaking to Hindustan Times, Tanuja Pradhan, Research and Business Analytics Group at C&W, blamed the discrepancy on builders.

“We hardly see any affordable houses being built and the focus of builders is on premium apartments. This is creating a wide gap in the demand-supply ratio,” Pradhan said.

She added that after buying land at auctions, the major aim of builders is to recover the investment as soon as possible and this was done by building big-ticket apartments.

At recent launches, it has been noticed that builders have abandoned the concept of affordable houses and shifted to high-end luxury apartments with all modern amenities costing crores of rupees.

Builders, however, say that prohibitive land costs in the city are the real reason.
Vijay Wadhwa, chairman, Wadhwa Group, said builders are just coordinators and are being unfairly blamed for this mess.

“Landowners want to extract the maximum value for their land and we are left with no option but to build such apartments,” said Wadhwa.

He said the land itself adds up to 75 per cent of the total project cost and the government, with its huge land bank, should release land at fair prices.

Housing activists say, “Builders are greedy for quick returns and the state is only aiding them, leaving homebuyers in the lurch,” said Vinod Sampat, president, Cooperative societies Residents Users and Welfare Association.