Affordable segment continues TO HOLD THE KEY

Affordable segment continues TO HOLD THE KEY

Affordable segment continues TO HOLD THE KEY

The year 2009 started with gloom, painted all over the real estate sector. So much so, several of the leading realty players had to mop up funds to feed their cash-starved enterprises to retire old debts and fund new projects.

Industry players had written off the realty sector till 2011. Every constitu­ent of the industry (developers, real­tors, lenders and property seekers) were pinched down by the negative impact of the global slowdown.

But, according to industry observ­ers, the gloom was short lived and the signs of revival were visible since April-May'09.

A leading Indian realty sector web­site Makaan.com, conducted an exten­sive analysis of the residential real estate market covering the cities of Bangalore, Hyderabad, Chennai & other metros.

According to the findings of the study, Chennai emerged as the 5th most popular property hotspots in the country just behind Mumbai, Delhi/ NCR, Bangalore & Hyderabad. It accounted for 4.7 per cent of the total property demand in the above cities (demand being equal to number of searches conducted on Makaan.com).

Within the city of Chennai, 58 per centof the demand came fromChennai south, lGpercentfromChennainorth, 15 per cent from Chennai central and 11 per cent from Chennai west.

Chennai saw a slow but sturdy growth in demand in the first six month. The number of searches con­ducted on Makaan.com during January-March quarter for Chennai were 2 lakh; which grew to 2.15 lakh during the April-June period (a quar­terly growth of 8 per cent).

Aditya Verma, VP &Business Head, Makaan.com said that the surge in the real estate was on account of the signs of revival of the Indian economy. "People become increasingly sure of their future earnings. So there was a surge in property demand during the July-September period."

"The number of searches grew to 3.24 lakh during this period; a respect­able increase of 62 per cent over January-March quarter in the city," he adds.

Growth in affordable housing

The industry reached to a new level with the introduction of affordable hous­ing. This is the maj or highlight of 2009 as the focus was on affordable housing (housing under Rs 40 lakh) and will continue to remain so in the coming years.

This focus on this segment was not only from property seekers but also from developers. They recognized the fact that the real demand was in this segment and that it makes sense to concentrate here.

A leading developer based in New Delhi believes that developers would not like hike the prices as they realize affordable housing is a 'volume game'.

Differs Devinder Gupta, Chairman and Managing Director of Century 21 DGS, world largest brokerage house: "The affordable housing is selling at a rational price. I expect price of afford­able housing to appreciate by 10 to 15 percent."

In Chennai, 83 per cent of total demand is for affordarfle housing. The mid segment (Rs 40-75 lakh) demand is around 10 per cent. The demand for high end (Rs 75-100 lakh), luxury (Rs 100-200 lakh) and super luxury (>200 lakh) is 2 per cent, 2 per cent and 3 per cent respectively. Over the course of 2009, affordable segment & mid-segment demand have Shown impressivegrowth in Chennai.

Accounting for 7.1 per cent of the total property demand as per the Makaan.com searches, the story is also similar in Hyderabad as 86 per cent of total demand in the city is for affordable housing. The mid seg­ment (Rs 40-75 lakh) demand is around 8 per cent. The demand for high end (Rs 75-100 lakh), luxury (Rs 100-200 lakh) and super luxury (>200 lakh) is 1 per cent, 2 per cent and 3 per cent respectively. Over the course of 2009, affordable segment & mid-segment demand have shown impressive growth in Hyderabad.

The city is peculiar from others as the demand for super luxury (>200 lakh) is higher than the demand for high end & luxury, observed the SUr-

InBangalore, the demand for afford­able housing is also quite high at 76 per cent. The mid segment (Rs 40-75 lakh) demand is around 13 per cent. The demand for high end (Rs 75-100 lakh), luxury (Rs 100-200 lakh) and super luxury (>200 lakh) is 2 per cent, 2 per cent and 7 per cent respectively. Over the course of 2009, affordable segment & mid-segment demand have shown impressive growth in Bangalore. The demand for super luxury (>200 lakh) has also grown handsomely and accounts for 7 per cent of total demand.

Anupam Mittal, Founder & CMD People Group that includes Makaan. com, feels that affordable housing seg­ment is likely to dominat most of the demand in 2010 and many of the realty players joining the bandwagon.

However, Mittal added an interest­ing rider that an affordable housing will remain a dream till there is ratio­nalization of land prices or special incentives are given by the Government to post affordability. "In the absence of the same, affordable housing will remain housing that is 20-30 kms away from the cities."

Makaan.com survey points out that demand for residential homes will continue to rise but the pace of growth will get muted in the coming year. The reason for muted growth, Aditya Verma said, is because the interests on home loan are likely to harden in the 2010 and homebuyers at large are scared of investing due to delays in the existing projects.

After a dull moment in 2009, Gupta felt that the sector can look forward to 2010. "The commercial space is expect-ed to be bright."

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