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Affordable housing – out of reach?

November 30, 2010 Leave a comment

The affordable housing market is evolving but it has its share of problems.Issues like land availability,pricing,finance and regulatory concerns have affected the supply of affordable houses.
According to NUHHP (National Urban Housing and Habitat Policy) 2007,an affordable house is defined as,”a dwelling unit having super built-up area not less than 300 sq ft for EWS (Economically Weaker Sections),500 sq ft for LIG (Lower Income Group) and between 600 and 1200 sq ft for MIG (Middle Income Group) available to the end user at a price that permits home loans in monthly installments,which should not exceed 30% – 40% of a person’s monthly income.

“However,affordable housing continues to be an elusive dream,especially for those in the EWS and LIG categories.Why is there a problem in terms of supply and implementation of affordable housing schemes P Suresh, MD, Arun Excello, believes that the biggest impediment to construction of affordable housing projects is the non-availability of land. He says, “It is impossible to find land at appropriate locations at affordable prices.Where can you find land at a cost of less than 1 crore per acre.  This is a big deterrent as land price accounts for more than 40% of the cost of the project.”It’s not just availability of land that we are talking about here. As Kumar Gera,Chairman,CREDAI (The Confederation of Real Estate Developers Association of India) points out,”Well-connected,accessible land with title and infrastructure needs to be provided on a regular basis. Only then can developers provide affordable housing in the real sense of the  word.”

In cities,in particular,land availability is a bigger problem. According to a report by McKinsey Global Institute (MGI),India’s urban population will soar from 340 million in 2008 to 590 million in 2030.How will the housing demands of the population be met with Sample this: 23% of India’s urban population resides in eight cities.If the housing shortage (of 26.53 million housing units) is to be addressed effectively,at least three million housing units must be added to the cities,every year.Instead,only 0.3 million housing units are being added in the existing cities.Urban land expansion is,therefore,the need of the hour.
As per the estimations given in the Second Master Plan,of the total housing demand of 12.38 lakhs,the demand for EWS and LIG housing will touch 3.71 lakhs and 4.33 lakhs respectively by 2026.More than 90% of those affected by the shortage in housing are from the EWS and LIG categories,for whom an affordable house would fall in the range of 4 lakhs to 7.5 lakhs. Most developers however continue to cater to the niche market that serves about 5-10 % of the population. As P Suresh points out,”Promoters are averse to handling more number of clients;in an affordable housing project,for instance,it’s a volume game. You need to provide a large number of housing units,as opposed to a luxury project where you deal with very few clients and big spaces.”
Coupled with this is the problem of financing affordable homes.To offset this problem and deliver financial assistance to the poor so as to enable them to purchase their own homes,the Central Government has instituted the ISHUP (Interest Subsidy Scheme for Housing the Urban Poor) scheme all across the country.”This scheme gives EWS households a subsidised loan for a period of 15-20 years for a maximum amount of 1 lakh. LIG households can avail of a loan of upto 1.6 lakh but the subsidy is not applicable for the remaining 60,000.The subsidy is 5% pa on interest charged and is deducted from the loan quantum right in the beginning,”says Dharmendra Pratap Yadav, Managing Director,TNHB.


Times of India epaper, 27 November 2010

Builders Ride The Residential Boom

The housing market moves up sharply, raising fears of another bubble building up

Along the Bangalore-Dodaballarpur Road, a dozen odd kilometers from Bangalore’s city centre, the lush green fields are broken by sprouting housing projects. Beyond the suburb of Yelahanka, there is frenetic construction activity. It’s a mix — spanking upmarket projects such as the Prestige group’s grandiosely named Monte Carlo lie cheek by jowl with clusters of cheap pink and white buildings. Further down the road, the Puravankara group is recreating a little Venice in the 23-acre ‘Venezia’ project, complete with crisscrossing canals, gondolas and presumptuous walk bridges.

Meanwhile, on the link road that connects the Bangalore-Bellary highway with the new Devanahalli airport, farmers are loading bundles of fresh cauliflower on a van. Just across the road is a big board announcing ‘Premium Meadows Villas’. The cauliflower patches will soon give way to Bangalore’s rapidly expanding concentric circles of urban development.

It is not just in Bangalore’s outskirts that you will see construction sites teeming with activity. In Delhi and its surrounding towns, in Mumbai, in Kolkata and in dozens of small, tier-2 towns, new building projects are being kicked off and dormant projects are being revived. In Mumbai, huge ultra-premium high-rise towers are being launched, while in Delhi and its surroundings, a whole host of housing complexes for every possible price range have been initiated. You would never guess that just a year ago; the real estate sector was in doldrums as projects stalled, buyers stayed away, and construction firms struggled with land banks and debt loaded on during the go-go years of 2006-08.

There is a slight difference between the current construction activity and the one during the boom of 2006-08. During that period, while many residential projects had been announced and built, the big focus area for many of the big builders was commercial space. Currently, there is relatively little activity on the commercial property area, which is still struggling to offload the huge inventory built up during the boom. Pankaj Kapoor, CEO of property market tracker Liases Foras, estimates the unsold inventory of completed and under-construction commercial property at 147 million sq. ft. Organised retail, too, is slow in picking up and many of the 350 or more malls in the pipeline have delayed completion with retailers reluctant to seal lease deals.

But interest in buying homes has picked up sharply once again. Reserve Bank (RBI) data shows there has been a robust growth in the disbursement of home loans in the past few months. Fresh home loans disbursed for 12 months ending 26 February 2010 (the latest data available) amounted to Rs 22,880 crore, compared to the Rs 16,431 crore disbursed over the same period in the previous year.

During the slowdown of last year, home loan demand and disbursement had fallen sharply. For fiscal 2008-09, home loan disbursement by banks fell to Rs 19,165 crore against Rs 26,802 crore in 2007-08. These RBI figures do not include loan disbursals by housing finance companies, but experts say the trend in these has closely mimicked the bank loans. For instance, in the case of HDFC, loan disbursements during fiscal 2009-10 were Rs 50,413 crore as against Rs 39,650 crore in the past year, representing a growth of 27 per cent.

Mixed Trends In Low-Cost Housing

At the trough of the slowdown from July 2008 to end 2009, desperate builders abandoned premium projects as demand had plunged. They turned to mass, ‘budget’ homes to keep the market ticking. Some cautious builders are still sticking to affordable housing — houses costing less than Rs 20 lakh in the metros. In April, some big Mumbai builders signed an MoU with the Maharashtra government to build 500,000 affordable homes in the Mumbai Metropolitan Region (MMR) over five years. The government has promised to relax density norms. In the National Capital Region — Gurgaon, Faridabad, Noida, Ghaziabad and Indirapuram — dozens of low-priced projects have been announced. But a number of builders who had embraced low-priced housing projects are slowly upgrading many of these to target middle- and higher-income groups. These segments, after all, offer far better returns.

Business World, 5 July 2010

Realty bounces back

 

Yes,but not at boom-and-bust levels.This time,the market appears to be more realistic

For years, Noida resident Arvind Ratra planned to buy a flat. He never got round to it until a few months ago. What helped him decide was a slew of affordable options suddenly available on the market. He bought a threebedroom flat in Noida Extension,a hotbed of construction activity in the National Capital Region (NCR),for just Rs 26 lakh. The price was right,the location was right. So I went ahead, he says.
There are many like Ratra who have invested in property recently. Those in the real estate business say that 2010 has been the best year in a long time for buyer and seller alike. Honey Katiyal,CEO of real estate consultancy Investors Clinic,says the number of units sold in Delhi/NCR alone this year have been more than that sold in the last decade.
Does this indicate a property boom Santhosh Kumar,CEO of real estate firm Jones Lang LaSalle Meghraj,is cautious:  The scenario needs to be seen in the proper perspective. Overall, the residential market in India is emerging from a difficult time.The outlook is positive,but as markets become more mature over a period of time,it is likely to translate into more purchases.
Many believe the spurt in market activity is mainly due to revival of projects that had slowed during the recession. Katiyal likens it to opening a tap that had remained closed for a long time.
The good news, say analysts, is that prices have become more realistic. In Bangalore,for instance,buyers are mainly those who put plans to buy on hold last year due to the downturn. Even though sales are happening, prices are not being pushed up unrealistically,like in Mumbai where prices have shot up by 30% to 40% in the last six months alone, while in Bangalore, prices have moved up marginally by 5% to 6%, says Raj Menda,president of Karnatakas CREDAI (Confederation of Real Estate Developers Association of India).
A key reason for the revival is the plethora of affordable options aimed at the mass market. Given the current demographic outlook of India and future urbanization levels, this segment is likely to find favour for a continued period of time, provided it remains affordable, says Kumar. Katiyal agrees that Nano products are driving the market now. The Rs 10-16 lakh segment, untaped till now, is seeing growth.
Affordability means many property buyers now are endusers as well, marking a shift from the time when speculators and investors dominated the market. Earlier,even in as conservative a city as Chennai,there were many speculators who wanted to buy,sell,make a profit and exit the market. This is changing now. Suresh Krishn,MD of Chennaibased Isha Homes,says that now end-users make up 90% of property purchasers. Theyre sensitive about price and keen on timely delivery.While the preference is for ready-to-use apartments,projects that get completed within a year are also getting sold.

In cities like Ahmedabad as well as in its 25-30 km periphery,there has been a flood of new projects in the last six months,says Jaxay Shah,president of CREDAIs Gujarat chapter. This is mainly on account of demand from end-users and investors,many of whom are NRIs.

But the revival is not uniform across the country. The Jaipur market is working overtime to regain stability. During the boom some years ago,every other person became a developer, says Kunal S,a real estate professional. They floated projects but could not bear the meltdown effect. Money was in the marketplace but it was all investors money. To push their projects now, developers are adding freebies,which werent part of the original deal.

It is the opposite in Nagpur,where housing has traditionally been more expensive than other cities. Experts say that when prices plummeted in bigger cities such as Mumbai and Pune two years ago,the Nagpur market survived. Though demand fell due to high prices, builders did not budge as they had spent their own money. The result is that the flats now being built here could be anywhere between Rs 80 lakh and one crore. But the demand, says a builder,is from a limited section only. There arent many affordable options for the middle-segment. Even in boom towns like Pune,the market hasnt fully recovered.Experts say that Pune and adjoining areas are facing land scarcity,restricting development of the real estate market.
Even so,the future looks bright.Markets are quite adaptive as they realign themselves to potential growth, says Kumar. Areas likely to get connected to main infrastructure as well as having right pricing will continue to drive the residential sector.

Times Of India, 19 July 2010

Affordable homes – a concept here to stay

The 2008 recession created a new segment in the real estate industry – affordable homes. Through the years of the IT driven property boom, especially from the early 2000s, a home meant stretching resources to the maximum. With sky-rocketing prices, many were left out of the race as they could not afford the steep prices.

Buying in the outskirts was not considered feasible as the connectivity was inadequate. It did not look like the steep demand for property and the IT boom that pushed the property market would change things either.

Then came the recession at the end of 2008. The slump in the IT sector and job uncertainty all around impacted the real estate sector, just as it did many others too.

The property market, significantly driven by the IT sector, went through a price correction . And along the way, the new segment – affordable homes – came into being.

Two factors led to the creation of this new segment. The first was the emergence of a new target audience. Those from sectors not affected by the job uncertainty, such as the state sector, were a prospective target audience for developers.

This segment, along with the many waiting in the wings because the rates were too high for them, formed a niche market to tap. Along with the job security came salary hikes too making a home a possible dream for many.

Developers who recognised the opportunity either changed plans to cater to the demand or launched new affordable home projects. Essentially, an affordable home came to be defined as a flat around 1,000 sqft costing between Rs 30-45 lakhs.

While the concept of affordable homes was gaining ground, the connectivity to the outskirts too improved vastly with projects such as the six-lane Bellary Road being completed and many localities once considered distant coming closer to the city centre in terms of commuting time.

The relatively lower land cost in the outskirts made it even easier to plan affordable home projects here given the fact that land contributes most to the cost of a project.

It was not long before affordable home projects sprang up all around the city, most offering all modern and basic amenities too. With realty proving to be a lucrative investment over time, these homes were good value buys. They promise good returns over time as the city expands.

Now, as the market bounces back and more buyers across the spectrum pick up residential properties, this segment continues to remain a good market to tap. The lower interest rates and tax breaks on home loans have brought more buyers into the market. The extension of the one per cent interest subvention scheme of the government on home loans up to Rs 10 lakhs where the cost of the house is not more than Rs 20 lakhs is another benchmark for the realty sector. Here too, the demand from this segment was largely untapped.

As the city expands and more commercial belts come into being, the demand for housing increases. Bangalore has space and potential on all sides to expand and host commercial hubs. The IT sector for one will look at expansions around the city as the old IT belts exhaust space. The manufacturing sector too will change the skyline as industrial belts developed by the state government agencies fuel commercial development.

The affordable home segment will draw buyers from every industrial sector, be it IT or manufacturing. These projects also come in handy for companies looking at transit flats for their junior and middle level staff. Buying an affordable home project in the outskirts holds potential for capital appreciations. As an investment, as the city expands, such projects that find themselves in developed localities at a later point in time, will fetch high returns. The affordable home segment is a tag here to stay.

Economic Times, 10 July 2010

Affordable housing

QUICK BYTES: Several upmarket Chennai developers are waking up to the need for budget homes and have launched large-scale projects in this segment.RADHIKA RAMASWAMY analyses

IN THE PAST SIX TO EIGHT MONTHS,ONLY AROUND 3,000 AFFORDABLE UNITS HAVE BEEN DEVELOPED IN CHENNAI

 

 

There was a time when buying a house was restricted to the realm of those who had the financial resources.There was a time when the average middleclass buyer contemplated the purchase of a home when he/she touched the age of 40.Today,the disposable incomes,aspirations and standards of living of people have gone up by many notches.As a result,there has been a paradigm shift in the home-buying pattern,thanks to the real estate industrys latest buzzword,affordable homes.In the last four years or so,affordable home was just a jargon in the vocabulary of real estate.Several prominent developers in the city did not cater to this segment.Until last year.This year is different.More than 30 prominent developers have embarked on building affordable/budget projects across the city.
What are the factors that have accounted for an upsurge in this housing segment According to a recent study,the total housing shortage across the country is 24.71 million units and in Tamil Nadu alone,it is 2.81 million units.As per the Chennai Metropolitan Development Authority’s (CMDA) second master plan,the city requires over 4.13 lakh houses by 2011,of which 3,52,000 should cater to the low-income and middleincome groups.In the last six to eight months,only around 3,000 affordable units have been developed in Chennai.
In the ongoing Budget Home 2010 exhibition being held at the Chennai Trade Centre,Nandambakkam,until July 4,over 60 developers from across the State,are showcasing their affordable home projects that range from Rs30,000 to Rs35 lakhs.G Sakthivel,Managing Director,Eyeball Media Private Ltd,the organiser of Budget Home 2010,says,”Last year only two prominent builders had affordable projects.This year,over 15 prominent builders are showcasing their budget projects in the exhibition.With prominent developers coming forward with affordable projects ranging between Rs10 lakhs and Rs 30 lakhs,it has become easier for middle-income groups to invest in a house in the outskirts of the city.”
As Kalyan Jayaprakash,Director,Inno GeoCity (a township being developed in Oragadam by a global investment group called Inno),points out,”There is an obvious demandsupply gap in housing across the country,especially in the affordable housing segment.In fact,many big developers catered only to the topof-the-pyramid segment until last year.The profile of home buyers ranges from young professionals in the age group of 20 and 35 to senior citizens,who want to spend their retired lives in the peaceful outskirts,the introduction of affordable projects was but obvious.”
The economys revival is also among the many reasons attributed to this sudden surge in affordable projects.The revivial has witnessed significant industrial expansion,as a result of which,there are recruitments taking place on a large scale.The situation has,therefore,become ideal for developers to create projects for the young,migratory professional demographic.

“Affordable is a relative term,”says S Ramakrishnan,CEO,MARG ProperTies Limited.”For a factory supervisor,affordability will range anywhere between Rs4 lakhs and Rs6 lakhs,for an IT professional,the budget will be between Rs12 lakhs and Rs25 lakhs.We are trying to merge the aspirations of a buyer with the value of the project.Our objective is to provide houses that match a buyer’s needs and aspirations.”MARG ProperTies is developing a large 1,000-acre township,MARG Swarnabhoomi off ECR primarily catering to the middleincome group.”Budget housing is definitely not possible within city limits.Which is why the outskirts are ideal with large land parcels,coupled with necessary social infrastructure.That apart,suburbs also play host to a number of IT majors and manufacturing industries.So why not”adds Ramakrishnan.The projects that fall under the affordable category promise to provide facilities identical to their upmarket counterparts.That apart,most of them are strategically located near industrial /manufacturing /I T units,and therefore,cater to people working in and around the area.”We call this walk-to-work.It is possible for a young couple with a combined income of Rs40,000 a month to invest in these affordable projects.Their EMI will work out to Rs10,000 every month,which is not too much in the long run.”
Kishore Kumar,VP – Marketing and Customer Care,True Value Homes (TVH),which is building TVH Swaya (in Sriperumbudur with units priced between Rs10.9 lakhs and Rs21 lakhs) says,”Banks were not liberal in giving housing loans earlier.But now banks are ready to give housing loans starting from Rs10 lakhs.If there are funding agencies readily available to give housing loans and people who are ready to invest in homes at a very young age,there is no reason why we shouldn’t cater to this segment.”With gap in rentals and EMIs coming down,it makes more sense for people to invest in these low-cost homes than pay life-long rentals.R V Shekhar,MD,Lancor Builders,however,has a different point of view,”It is true that there are many takers in this segment but when it comes to giving loans worth Rs10 lakhs or Rs15 lakhs,banks usually demand for 15% of owner’s equity.Owing to this,several buyers might back out and developers also may not be willing to risk his reputation.But with people queuing up for houses below Rs30 lakhs,budget housing is definitely the need of the hour.”

Times of India, Times Property, 03,July 2010

TATA housing building apartments in all categories – starting from 3 lakhs

TATA HOUSING

 

Kolkata: Tata Housing Development Company would pump in Rs.1,000 crore this fiscal to its various projects across the country, a top company official said here on Friday.

Sixty percent of the investment will be in the northern and western parts of the country, Managing director and Chief Executive Officer Brotin Banerjee told mediapersons here.

“Out of the total amount, about Rs.400 crore will be spent on land acquisition and Rs.600 crore on the construction,” Banerjee said.

A subsidiary of Tata Sons, the company hopes to sell around 45 lakh square feet of built-up area in 2010-11.

The company, which had a compunded annual growth rate (CAGR) of 125 percent and quadrupled its profits in fiscal 2009-10 in comparison to 2008-09, is focusing on the metro and bigger cities.

Among the cities covered by the company are Chandigarh, Delhi, Kolkata, Hyderabad, Chennai, Mumbai and Hyderabad.

The company’s projects are divided into four categories – Shubh Griha apartments priced at Rs.3-4 lakh targeted at the low-end customers, affordable apartments priced between Rs.12-30 lakh, premium apartments costing from Rs.60 lakh to Rs.1.5 crore and luxury apartments priced between Rs.2-Rs.8 crore.

“We want to build each category of apartments in each of the cities we are working,” Banerjee said.

The company is constructing 270 residential units at Rajarhat in the north eastern fringes of Kolkata in the luxury category. The project will be completed in 24 months.

Tata Housing is also looking for land in Sonarpur and Baruipur of South 24 Parganas district, Dankuni in Hooghly district and Kona in Howrah District.

As printed in Samay live, 11th June 2010

CREDAI concern over service tax on apartments

CHENNAI: The Confederation of Real Estate Developers’ Association of India (CREDAI) has voiced its concern over the introduction of service tax on the sale of apartments/houses, which will ultimately burden the end consumer.

A press note from the National Secretariat of CREDAI said that the move had gone against CBDT’s own circular of January 29, 2009, where it was specifically exempted on certain conditions. Bringing rental of properties into the Service Tax net is totally a retrograde step as it will halt investment into rental housing stock, the release further said. However, it welcomed the amendment issued pertaining to provisions of section 56 (2) (VII) – an anomaly, which has been rectified now. While lauding the extension of one year for completion of projects availing of benefits under section 80-IB (10) for projects approved on or after April 1, 2005, the larger industry request of extending the scheme of projects under section 80- IB (10) for new projects of affordable housing has been totally ignored. Even the marginal increase of 3000 sq ft commercial space in 80-IB (10) projects is inadequate compared to the size of the project.

Express New Service, 03 March 2010

Is it time to buy your dream home?

February 25, 2010 Leave a comment

Dream house

With the economy giving indications of a recovery, the question as to whether this is the right time to buy property has yet again surfaced.

However, the answer as to whether this is the right time to buy, is not a simple yes or no, but depends on a number of factors like whether a buyer is looking for a first or second house, for living or investment and if it is an investment, whether it will be a long-term or short-term one, etc.

If we consider two property hotspots in the country, Delhi-NCR and Mumbai, it has seen two booms and two slumps in the last decade. The ups and downs may continue, regardless of prevailing market sentiments, depending on the project, geographical locations and various other factors.

Although developers have launched a slew of ‘affordable houses’, the dimensions and specifications of these new offerings are lower than those of earlier apartments. Swayed by the highway billboards, television producer, Preeti Banerjee went on a house hunting spree.

What she was offered with the new affordable launches was not only a cut in the per sq ft prices, but also reduced size of apartments by almost 30-40 per cent. She soon realised that “The combined effect is that prices of these so-called ‘affordable apartments’ have not gone down, as low as they may appear,” she cautions.

From a macro economic perspective, these booms and slumps predominantly affect active investors and traders in property, who want to make money on every deal they make. The dilemma of whether it is the right time to buy, is always there for those who are looking for their first home.

Even when the market was worst hit by the recession, there were good deals in the market for those looking to invest in property. If the fundamentals are strong, i.e., where the property has clear title, is in an area where growth is expected and where prices have already corrected, then one may opt for buying.

Realty companies assert that the prices have reached the bottom and will only move northwards, hereafter.

“In a demand-supply mismatch scenario, the prices have to go up, unless there is a case of more land being released,” says DLF spokesperson, Sanjey Roy. “Moreover, it is a myth that the buyers are staying away from the market. Even in the recession-hit market, in FY 2008-09, DLF managed to sell more than 8,000 flats,” he shares.

All realty experts agree that the days of speculation are over. Property prices are determined by the fundamentals of demand and supply, added with civic amenities and growth potential of the geographical region. The demand in the market had skyrocketed when the economy was doing well, new jobs were being created and salaries were going up. The emergence of the suburban housing market gave people an opportunity to buy property at relatively lower prices and mortgage loans were available at lower rates.

The economic downturn, however, taught a tough lesson to those who had overstretched themselves with the EMIs. Now, with the economic growth consolidating, consumer behaviour will be moderate, for the next few years. Analysts believe that price corrections, beyond the 10-35 per cent that the market has already witnessed, may not happen in the metros and suburbs, due to the holding capacity of the bigger developers.

However, lack of funding options may force some standalone local builders to drop prices. While the metro and suburbs’ property prices seem to have stabilised, after a correction of around 10-35 per cent, there may also be a trend of speculators exiting the B and C grade cities, fearing the end of high appreciation.

Sanjay Kackar, COO of AEZ Group, believes that the debate over the right time to buy property was never an issue in the residential segment. “The market is offering the best deals to the end-users for the last 18-20 months. However, the significant development, off late, is the fact that even the commercial segment is now offering excellent deals in the Delhi-NCR and some other metro cities,” he explains.

Some trade analysts believe that the property market may bounce back in the next three to five years and prices will recover. However, most of the experts agree that there will not be another 200-300 per cent increase. In Mumbai, property brokers assert that the prices of apartments have started moving up because of a revival in demand. As the city does not have much supply, a slight recovery has already pushed prices up in posh areas, by 10-20 per cent.

However, the road to recovery for the realty companies is not that smooth. Many of the frontline realty players are deep into debt and their stock valuation has also nosedived. The era of rapid capital appreciation too, in real estate, in some cases by 300 per cent, signalling a lot of liquidity and speculation in the sector, seems to be over. While this may not be good news for builders, for the common man, the bursting of the real estate bubble, may prove to be a blessing in disguise.

Economic Times

Property Survey – 56% interested in buying a house now!

February 7, 2010 Leave a comment

Buy a house, property

 

Around 1,500 individuals took the online survey and it was noticed that 33% of the people assume that the property rates will remain the same for 6 months and 24% think it may increase by 10% in the next 6 months.

Chennai – IndiaProperty.com, India’s No 1 property site that offers the best comprehensive property resources and keeps conducting surveys to get insights on the mind frame of the consumer which in turn helps serve them better. The website conducts online surveys every quarter to get a hold on knowing the attitudes and preferences that property seekers value in the real estate sector.

Around 1,500 individuals took the online survey and it was noticed that 33% of the people assume that the property rates will remain the same for 6 months and 24% think it may increase by 10% in the next 6 months.

Commenting on the survey findings Murugavel Janakiraman Founder & CEO IndiaProperty.com said, ” 56% of the buyers feel that the interest rates will remain the same and that they are looking at immediate investment within the next 6 months. The trend for 2 BHK (46%) and the option below 50 lacs remains but there is an interestingly 10% of the people who still opt for 75 lacs investment. Builders should also take note that while the affordable housing is still in trend, there are at least 20% of the people looking at independent houses which will cost above 50 lacs”.

We at IndiaProperty work constantly towards bringing in a new method/transformation while our members are searching for properties on our site.

Builders are also launching different kinds of property projects to suit the demands of its varied customers”. He added.

Indianproperty.com, February 4, 2010

Chennai builder to promote Rs 4 lakh apartment

January 24, 2010 Leave a comment

Nano home - affordable housing 

CHENNAI: Owning a dream home for many a poor Chennaiite could soon become a reality with a leading builder, Khivraj Estates, all set to promote a low-cost residential project at Thiruvottriyur, 10 km from the city centre, at Rs 4 lakh per 269-sq ft studio apartment. The project will come up in an area where a 650-sq ft apartment costs at least Rs 15 lakh at present.

Khivraj MD Ajit Chordia says he embarked on the project drawing inspiration from Tata’s Nano Homes and Patrimonio Hoy, a cooperative initiative of Cemex, world’s leading building material supplier and the third largest cement manufacturer, started in Mexico in 1998 to provide shelter to 20 million homeless people in that country. In the 11 years of its existence, Patrimonio Hoy has spread to more than 100 centres in Colombia, Costa Rica, Nicaragua and Venezuela providing quality shelters to more than 2.08 lakh families.

Chordia has acquired a 1.1 acre plot close to Thiruvottriyur railway station, where he plans to promote 100 such dwelling units in the first phase. The bigger apartments, each measuring 485 sq ft, would cost Rs 8.7 lakh though. “Based on its success, we propose to expand it to another four acres abutting the first phase,” he told TOI.

He has engaged a team to bring down the cost of construction. “As of now, the overall cost works out to Rs 1,800 per sq ft. But we will bring it down to Rs 1,500 per sq ft at least for our own employees, who buy from us,” he said. Hoping that at least 10% of them would opt for the project, Chordia said, “We know about their skills and many of them can do works like interior painting and electrical wiring. By adopting high levels of standardisation and using pre-fabricated material, the cost can be reduced further.”

If the state and central governments could extend relief on infrastructure and metrowater charges, stamp duty and sales tax for such low-cost housing projects, the benefits would reach a wider section of the bottom of the pyramid, he noted.

Another builder, Vijay Shanthi, is launching a low-cost residential project on the Kelambakkam-Vandalur Road in South Chennai, where a 350 sq ft studio apartment will be available at Rs 7.35 lakh. Suresh Kumar, MD of Vijay Shanthi said there will be eight lakh sq ft built-up area and 850 apartments in the project. He has acquired a 10-acre plot for the purpose. Vijay Shanthi had last year launched the cheapest apartment on OMR at Rs 9 lakh per unit.

Times of India, 24 January 2010