The Hindu Business Line : Bangalore developers move to affordable housing segment

With the threshold being lowered, and banks coming out with favourable interest rates for the sub-Rs 20 lakh home loans, this segment looks brighter and attractive for developers and buyers.

Anjana Chandramouly

Bangalore, Jan. 28

The real estate industry desperately wants buyers back in the market. The mid-market residential category (Rs 50 lakh to Rs 70 lakh) is no longer attractive in Bangalore, and developers are moving towards the affordable (sub Rs 30 lakh) housing segment.

“People are now willing to buy only in the Rs 20-50 lakh range. A bulk of the demand is in the Rs 20-35 lakh category,” says Mr Parag Sen, Vice-President – Marketing and Sales, Golden Gate Properties.

In the next 3-4 years, 40-45 per cent of the projects launched would be in the sub-Rs 50 lakh segment. “Of that, a large chunk would be in the affordable or sub-Rs 30 lakh segment,” says Mr Pericho Prabhu, Senior Vice-President, Orange Group.

With the threshold being lowered, and banks coming out with favourable interest rates for the sub-Rs 20 lakh home loans, this segment looks brighter and attractive for developers and buyers alike, says Mr S. Vasudevan, Managing Director, Ozonegroup.

The company recently launched its ‘Evergreens’ project off Sarjapur Road, which was “designed keeping the larger market in mind,” he adds.

Developers, thus, are also shifting their “focus towards public sector employees, and in the next 4-5 years, they would be a significant market,” says Mr Sen. Golden Gate Properties announced its affordable housing project, ‘The Commune’, a few months ago, which, according to him, has been quite a hit among bank employees.

“We even conducted road shows for them,” he says. Public sector and bank employees constitute about 35 per cent of the sales in Phase 1 of the project – 324 units, adds Mr Sen.

Similarly, 20 per cent of sales for Orange Township from the Orange Group – with apartments in the Rs 13.59 lakh to Rs 30 lakh range – could be attributed to PSU and bank employees. Mr Sen reasons that until a year ago developers didn’t have products in the affordable segment. About 80-85 per cent of the project launches from known players was in the Rs 50-plus lakh category, he says.

During the peak of the real estate boom, in locations such as Sarjapur Road or Outer Ring Road where many projects were being launched, “products were not within the reach of the PSU and bank employees. Hence, owning a house remained a dream for them,” says Mr Vasudevan.

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