Bengaluru: 2016 promises to be an exciting year for India’s affordable housing sector, with a number of real estate firms across the country planning to launch projects in this category, enter new geographies and address the massive demand for low and mid-income housing.
It also helps that the Union Budget 2016-17 has proposed certain service tax exemptions that will provide much relief.
Private developers’ record on low-income and mid-income homes has been patchy and far from smooth, with lengthy approval processes, difficulties in sourcing land with clean titles and keeping deadlines in check. But in a rather slow property market, developers perhaps think that building homes for real buyers, at reasonable prices is a safe bet.
Here is what some of the top developers in the affordable housing space planning this year:
Two years after Mahindra Lifespace Developers Ltd launched its affordable housing arm Happinest with pilot projects in Avadi, Chennai and Boisar, near Mumbai, the Mumbai-based developer is now planning a third project in Palghar, near Mumbai. The 22-acre project has received approval. The firm is also launching a third phase in the Boisar project, with 150 units.
“We tested the space to see if we can actually do it and now, with the learnings from both the projects, we are ready to do more. We would like to build homes in the Rs.10-25 lakh category,” Sriram Mahadevan, business head-Happinest, Mahindra Lifespace said.
Tata Housing Development Co. Ltd, an arm of Tata Sons Ltd, plans to launch at least 3-4 projects and is speaking to potential partners across Noida, Kolkata, Mumbai, Bengaluru, Chennai, Pune and Ahmedabad, after mainly focusing on project execution and delivery in 2015. Fresh projects apart, it will also launch new phases in existing projects in these locations.
These projects will be launched under its budget housing brand—Tata Value Homes—that sells apartments at an entry price of Rs.16 lakh. It has around 10 ongoing projects in cities such as Talegaon (near Pune), Ahmedabad, Bengaluru, Chennai, peripheral Mumbai and the National Capital Region (NCR).
Shapoorji Pallonji Group
Earlier this year, The Shapoorji Pallonji Group launched its first affordable housing project under the Joyville brand in Howrah, near Kolkata.
Two more projects are expected to be launched this year, in Mumbai and Pune. The price range of the residential units will be in the range of Rs.20-22 lakh for a single bedroom unit and Rs.45 lakh for bigger two-or three-bedroom flats. In Mumbai, due to the high cost of land, prices may go up toRs.60 lakh.
Assetz Property Group
Bengaluru-based Assetz, which has so far focused on high-end projects, will launch homes in a lower price category this year. It plans to launch its first project, off Sarjapur Road, by end of March. The project will have 1,800 residences, where a one bedroom-hall-kitchen unit costsRs.35 lakh.
“By the end of the year, we are scheduled to launch two more projects, in Nelamangala and Shettigere,” said Ben Salmon, co-founder and chief executive, Assetz.
VBHC Value Homes Pvt. Ltd
VBHC, promoted by entrepreneur Jaithirth Rao, plans to launch projects across various states this year. It is also looking to enter new states as a part of its expansion strategy.
“We are encouraged by the budget proposals that reemphasises that we are on the right track,” said Ravi Ramu chief executive and managing director.
Brick Eagle Capital
Brick Eagle Capital group, which calls itself a social housing platform and invests in companies in the affordable housing space, will launch two large projects this year: A 77-acre township in Vadodara with DBS Affordable Home Strategy Ltd, with homes priced at Rs.5-20 lakh, and a mid-income housing project in the outskirts of Coimbatore along with investee company Sheltrex Developers Pvt Ltd. The first phase will have homes priced at Rs.30 lakh upwards, and at a later stage, lower priced homes will be launched.
“I am very bullish about budget housing this year and we are expecting a lot of launches and supply to come in. With the tax breaks in the budget, hopefully, more frontline developers will also enter this segment,” said Rajesh Krishnan, founder and chief executive, Brick Eagle.
Krishnan said that tapping end-user demand and reaching out to more and more customers, hand-holding them and walking them through the whole house buying process, is the toughest challenge.