Budget housing being preferred by Builders
With apartment sale in luxury and middle class segment on a decline, budget housing is the new innovation in the property market. Majority of the builders are now focusing on developing housing units in under 20 lakh price range.
A new Innovation
Given the decline in interest among luxury customers, builders are now focusing on identifying land tracts and are creating property for those who cannot afford to have luxurious homes. Developers in Chennai have been sitting idle for long as major housing projects are not able to get buyers. They are now considering constructing budget houses which can be bought for fewer than 20 Lakhs.
It is however ironical that builders had always ignored affordable housing segment in the past. A fair reason that builders cited here was that margins were quite low in affordable housing segment; hence they focused on luxury housing category. However, in the changed scenario, these builders have now decided to focus on budget housing.
Reason for downfall
Housing segment gets sustained on customers who are ready to pay a fair price for buying a residential unit. However, over the last few years recession has been seen in manufacturing sector in Tamil Nadu. This has had a direct effect on the housing industry as top notch executives who found Chennai to be a lucrative city have moved on.
Slow pace of employment generation particularly in the Information Technology has led to large scale recession in the segment and professionals have moved on to cities like Bangalore. Retrenchment of employees has taken place to a large extent in places like Sriperumbudur. This has led to fall in demand of flats in Chennai and real estate developers have been left in the lurch.
With fewer investments coming in the near future, the prospects seem bleak in the coming days. This has led to drastic shift in the mindset of builders and they are now focusing on developing low cost housing units.
Land prices in outskirts of Chennai are also rising by the day even as real estate majors are looking for identifying new places for building low cost units to cater to the present demand.
References:
Times of India
Affordable housing segment, developing housing units, low cost housing units, major housing projects
