Affordable Housing in demand

September 10, 2008	(Be the first to rate this story!)  Loading ...
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The Indian real estate sector, had till recently been focusing on catering to the high demand for luxury living. Small house segment was ignored completely. High consumer confidence, low interest rates and a belief that the prices will only one-way, led to this euphoria. Several construction companies raised large sums of money through IPOs. After the January 2008 crash, the real estate stocks are among the worst affected. Whereas, the stocks were down, the prices of houses and real estate have not seen any appreciable corrections. Business World reports that in Mumbai recently, Bandra Kurla complex, a piece of commercial estate got only Rs 15,000 per square feet against Rs. 40,000 for a similar property in 2007.

With rising prices and interest rates, the demand for luxury apartments (Above Rs 50 lakh per apartment) has dramatically come down. In India, housing if priced correctly has an enormous demand and given the huge housing shortage, it is unlikely that there will be any saturation in the market for a long time to come. This is a win-win situation for both, the buyer and developer. The attraction for developers in the affordable housing segment is assured sales and upfront cash flows. While margins may be lower compared to high-end projects, they make up in terms of volumes.

News Published Under:   Real Estate India |

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