A home inside the bubble

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With the indices in a freefall and the real estate market set to redraw the parameters, the time is just right for builders to explore newer avenues to generate housing projects that are easy on the pocket. This, many developers feel, make both social and business sense.

According to Anuj Puri, country head and chairman, Jones Lang LaSalle Meghraj, “It’s the business sense in terms of volumes that the market is offering to which developers can cater to, and social sense because it provides buyers of economical housing more options to choose from. The demand in terms of units is phenomenal and developers getting into this segment can build for years to come. With this, mid-income housing is once again a star in the real estate investment route lineup.”

There are various factors aiding the mid-income housing segment. Owing to higher incomes and the availability of housing loans, buyers are no longer as price-sensitive as they were in the past. The present generation is not conservative about home loans, and is also less averse to risk. Moreover, there is now a decided shift from the joint family to the nuclear family. While the past generations did give importance to planning for the future, they lacked the tools that are at the current generation’s disposal.

Most developers have identified these factors and zeroed in on them by making affordable housing available to these buyers. The buyers get what they want, and the developers benefit by the sheer economy of scale. In this win-win situation, some of the biggest names in the Indian real estate industry have begun responding to the clarion call for affordable housing, and foreign funds are pouring in via joint ventures. Most big players are getting into the middle-segment housing either by building clusters of middle-income homes or by redeveloping dilapidated buildings. These developers are exploring a business avenue that has stood the test of time in terms of overall sustainability.

Says Vikas Oberoi, managing director, Oberoi Constructions, “We have started getting actively involved in certain locations in Mumbai to redevelop the dilapidated buildings, thereby targeting the mid-income home buyers.”