Property developers eye mid-segment market
  With low-income homes not fetching enough margins and luxury homes not finding enough takers, builders have found a sweet spot in middle-income housing projects, where buyers are willing to put up Rs2.5-5 million for a home. Among developers who…

  With low-income homes not fetching enough margins and luxury homes not finding enough takers, builders have found a sweet spot in middle-income housing projects, where buyers are willing to put up Rs2.5-5 million for a home.

Among developers who have launched mid-income housing projects recently are Shapoorji Pallonji Real Estate, Hiranandani Group and Puravankara Projects Ltd reports Mint newspaper.

“More and more builders are now trying to build in the MIG (middle-income group) price bracket because they have the right balance of high demand and profitability of margins,” said Venkatesh Gopalkrishnan, chief executive officer, Shapoorji Pallonji Real Estate, part of the Shapoorji Pallonji Group, which builds Rs3m-6m homes.

With the challenges of building LIG homes becoming clearer—far-off project locations, poor infrastructure, low margins, mortgage unavailability—convenience of location, compact homes and pricing have attracted MIG buyers. For builders, the segment offers profitability and sales volumes at a time of unprecedented slowdown in the real estate sector.

It has helped that many of the government’s incentives for housing have also been in this price segment, boosting the confidence of builders and buyers alike.

Hiranandani Communities, which has two integrated townships in Panvel and Chennai, plans to build 2,000 500 sq. ft homes for Rs3m each at Hiranandani Fortune City, Panvel. Hiranandani has always been associated with building premium and luxury homes so far.

“As you reduce the price points and customise the size of homes to fit the buyers’ budget, the number of customers goes up. The luxury residential market has got exhausted, and this is a natural choice,” said chairman and director Niranjan Hiranandani.

In the July-September period, a total of 64,781 residential units were sold across the top eight cities, of which 23,493 units were in the Rs2.5-5m price category and 12,136 in the below Rs2.5m category, according to Liases Foras Real Estate Rating and Research Pvt. Ltd.

There is fair demand for homes in the Rs5m-10m category as well, with 18,682 units sold, the report said.

Interest subsidy on home loans for MIG households was announced in September. In November, the Union cabinet increased the carpet area of houses under the government’s affordable housing scheme which can help homebuyers, with annual income between Rs 600,000 and 1.8m, access bigger, ready-to-move-in houses at lower costs.

 

Related Articles

Related

Finding the right Due Diligence Tools

Choosing the best research tools for your enterprise can help reduce the time and effort you spend on exploration. These tools help you to get a better thought of a industry’s connections, financial performance, and legal record. They also allow you to identify a...

read more

TotalAV Antivirus Review

Designed with convenience in mind, TotalAV is a great antivirus collection that offers thorough Learn More Here protection against viruses, malware, malware, plus more. It features an straightforward user interface and a wide range of features to help shield your...

read more

The right way to Conduct a Board Gatherings Overview

During a table meetings overview, directors of a company discuss their latest efficiency, new business options and possible plans for you can actually future. The board also evaluates current and past strategies. The results is a strategy for you can actually growth....

read more

0 Comments

Submit a Comment

Your email address will not be published.

Share This