Developers are now reworking their strategy to target middle-class clients looking for smaller houses outside BMC limits

The realty market is stagnant and work on several under-construction residential projects has slowed down, but several builders claim brisk sales in smaller places like Thane, Virar, Panvel and even Nashik.

Runwal Group:
"We were not seeing any great demand for premium flats but our study showed a good demand for budget housing,'' he said. "Housing loans below Rs 20 lakh being in the priority sector means consumers get a double benefit in terms of a reduced interest rate as well as a more affordable pricing,'' said Sandeep Runwal, Runwal Group.

Keystone:
"About 60% of the city's population earns less than Rs 2-Rs 3 lakh a year. There is no housing project for them,'' said Boman Irani of Keystone.

Akruti:
Another developer, Akruti, has changed its plan to set up a commercial building on Thane's Pokhran Road No 1; it has decided on a budget residential project with compact houses.

The developer will soon launch its Just Perfect Homes project with 1-BHK and 2-BHK flats, worth Rs 21 to Rs 25 lakh, in Thane.

PRA Realty:
The US-based PRA Realty is for the first time tapping the market for affordable housing in Pune, Nagpur and Nashik.

"The trend earlier was high-end construction. But developers are downsizing projects now,'' PRA managing director Rustom Bharucha said. PRA's proposed housing project on a 130-acre plot in Nagpur is looking at selling 1-BHK and 1.5-BHK flats priced between Rs 10 lakh and Rs 12.5 lakh.

TMC:
Tanaji Malusare City, a Matheran Realty project, claimed to have received 66,000 applications early this year for its phase-one sale of 3,000 units in Karjat. About 40% of these are 300-sq-ft flats selling for Rs 3 lakh each.

"Unexplored'' territory:

The salaried class found itself pushed farther away from the city with housing becoming virtually unaffordable during the boom. But, now with negligible sales and the market facing a liquidity crunch, industry experts say many builders are looking at this previous "unexplored'' territory.

It's possible!

A report on low-income housing in urban India, prepared by management consulting and merchant banking group Monitor Group, says it is possible to build for lower-middle class urban customers even with the current land prices and construction rates.

Within an hour of the city centre:

"Private-sector developers are building housing at Rs 800 to Rs 1,000 a sq ft in vibrant neighbourhoods within an hour of the city centre in most metros and towns. The smallest units they are currently building are 450-sq-ft to 500-sq-ft.

Flat for Rs. 2.50 to 3.20 lakh:

But a number of developers in cities like Ahmedabad, Jaipur, Mumbai, Hyderabad, Kolkata, Kolhapur and Vizag confirmed they could build smaller flats-250-350-sq-ft apartments-at Rs 2.50 lakh to Rs 3.20 lakh,'' the report, prepared for the National Housing Bank with support from the World Bank in 2007, pointed out.

Low-income housing in Mumbai:

Developers, however, said the concept of low-income housing would not work in Mumbai. "Land is expensive, cost of construction is high and the floor-space index is capped,'' developer Subodh Runwal said. "The definition of a low-income house in Mumbai is a 300-sq-ft flat that costs less than Rs 5 lakh. Developers will not step into this segment unless they are assured of a reasonable margin,'' he added.

Housing expert Chandrashekhar Prabhu said it was not the job of private developers to provide low-cost housing. "All over the world, including the US, it's the local authorities who provide for such housing,'' he said. In realty, smaller is better

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Indian middle class salaried families turning naxalite?

"How far can Indian real estate market rise?"

Arun blogged "How far can Indian real estate market rise?" on November 4th, 2007. He says "I am amazed at the way Indian real estate market is rising" and Arun tries to find out "What are the reasons for such multifold rise? and how long is this run going to continue?" He also gives his views.

Track in - India Business Blog:

For the last six months many people have shared their views on 'rising real estate prices' in the comments on his blogs. Day by day, you can see, we all are getting more and more angry.

You have expressed your anger on my blogs on PBAP's price hike and Pethkar Projects' Samrajya - Balwantpuram.

I am sure, you will agree with Dave. In his comment on May 16th, Dave says,

"Has anyone thought about socio-economic fallout? Middle class salaried families turning naxalites? When you can’t even buy a decent house when the economy is booming, would you not want social justice?"

Politics of Housing:

I do not find 'Indian middle class salaried families turning naxalite' difficult to believe.

Because housing has always played an important role in democratic politics, in British as well as US politics. Margaret Thacher coined the term "Home Owning Democracy" and came to power. President Bush had launched "Hope Now" for the victims of sub-prime crisis. Singapore boasts about home ownership. Except 45 individuals everybody owns a home in Singapore!

What about us, India? Honorary Secretory of PBAP, Mr. Nitin Nyati of Nyati Group has declared that housing schemes for the lower or middle classes are not feasible without government concessions!

What are you going do? Are you going to give up your right of "owning your home"? Are you happily opting out for 'renting'? or Are you going to fight for the "property ownership right"? Democratically or otherwise? Please, let me know in the comments. "EMAIL THIS" to all your friends and ask them what are they going to do? Subscribe to my blog and do not miss a single news and share your views about Pune real estate market.

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