Demand dwindling, realty firms go for budget homes

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With high inflation and soaring interest rates drying up demand in the realty sector, major developers have started focusing on affordable housing in Mumbai, Delhi and Bangalore, as well as in emerging cities such as Pune, Ahmedabad, Lucknow, Kochi, Indore and Gurgaon.

Key real estate players like DLF, Ansal API, Omaxe, Unitech, Puravankara, Matheran Realty, Indu Projects, Shriram Properties, Jain Heights & Structures, Shapoorji Pallonji and Hiranandani Constructions are shifting their focus from luxury segment to mid-segment and affordable housing.

Niranjan Hiranandani, MD, Hiranandani Constructions, said, “We are now planning to develop affordable housing projects in Pune and Ahmedabad (between Rs 15 lakh and Rs 30 lakh for two and three BHK flats). Our ongoing construction of affordable housing projects in Thane (Rs 40 lakh-Rs 70 lakh) and Panvel (Rs 40-Rs 55 lakh) is on in full swing and we want to make sure to give possession to buyers as soon as possible.

Said Kunal Banerjee, vice-president (marketing) of Ansal API, “For us the price in the mid-market segment is in the range of Rs 15 lakh to Rs 45 lakh depending on which city we are talking about.” He added that about 60% of demand for housing is from this segment. The firms’ projects in this segment include New Splendour homes in Jaipur, Celebrity Greens in Greater Noida and Lucknow, Orchard County in Mohali and Green Escape in Kundli. While conforming sector’s trend, Vipin Agarwal, executive director of Omaxe Ltd said, “Luxury housing will be few and far between for us. We will concentrate more on affordable housing which will be in the price range of Rs 3 lakh to Rs 10 lakh”.

The target customer for mid-segment housing is in the income group of Rs 25 lakh and Rs 45 lakh annually. However, many think that by Indian income standards this segment of houses is slightly more expensive than what the Indian middle class can afford.

“We can broadly categorise families earning in the range of Rs 2 lakh to Rs 10 lakh as the middle class of India”, defines, Pronob Sen, secretary, ministry of statistics and programme implementation and chief statistician.