The changing definition of affordable housing!

The dynamics of luxury housing has changed over a period of time. Today, Luxury deserves space and having a home which is fully amenitised, spacious apartments, modern facilities, modern security system, smart furniture, portable walls, etc.

Sep 26, 2019 11:09 IST India Infoline News Service

Srinivasan Gopalan
The definition of luxury has evolved in the past few years. In real estate particularly it was always dependent on the city’s most expensive area or location. The pin code of the area was the watchword and developers were keen on investing and operating within such selected vicinity. Considering the importance of the area, the prices of residential real estate were exorbitantly high and hence were investors market; and NRIs and HNIs would pay more for the privilege of having luxury pin code in their address.
 
The space crunch in these inner areas of the city encouraged developers to choose old buildings for redevelopment or resale market. But the value proposition of resale properties in high-value locations has been eroded by the fact that they are invariably in projects that lack the bells and whistles of what spells luxury in today’s context.
 
The dynamics of luxury housing has changed over a period of time. Today, Luxury deserves space and having a home which is fully amenitised, spacious apartments, modern facilities, modern security system, smart furniture, portable walls, etc.
 
Seeing the change in the taste and preferences of buyers for luxury homes, developers started experimenting with the locations, product sizes, customer experiences etc. and strived towards giving them an international standard product.
 
Developers, therefore, started making homes which were spacious and amenitised rather than just focusing on pin code. The projects clearly targeted the stereotype customer base who thought the address is the only luxury. Building a product with super quality material, giving more open spaces for recreational activities, landscaping to attract the eyes, high-end security, and spacious apartments at the inner market are now available.
 
Secondly, in cities like Mumbai and Bangalore, the definition of affordable housing has changed over a period of time. Due to space crunch, the city developers are offering the product which is near to all the social infrastructure like malls, cinemas, hospitals, and education center. One can enjoy the luxury lifestyle without compromising on the space of the apartment. Easy access to physical and social infrastructure makes the living luxurious as one saves travel time and can have the privilege of using the amenities available within a few kms of the project. The premium which buyers will save in such kind of projects can be used for their high-end interiors as well.
 
The strategic location also comes with great connectivity factors which are well encouraged by the developers. Developers are ensuring to construct a product which is well connected to highways, railways, airports, hospitals, educational institutions, etc.
 
Ascertain, the luxury housing with all the comfort and amenities became expensive and the unit sizes kept on shrinking. In the market today, few branded developers are not compromising on the size of the apartment and offering the real luxury of space. These homes are not just for the end-user but also generate good ROI for the investor markets.
 
The cities that have seen a surge in luxury housing are Mumbai, Bangalore, Delhi-NCR, Hyderabad, and Chennai.
 
Indian real estate market scenario has evolved into the past two decades by diverging into markets not centered around major cities like Mumbai and Delhi – NCR; as these markets were always considered unorganized in terms of demand-supply ratio.
 
The entry of IT/ITes sector changed the scenario of Bangalore real estate. And then after a few years, the focus slowly started shifting towards the southern cities. Today, the key southern real estate markets of the country - Bengaluru, Hyderabad, and Chennai - are robust, independent markets with Bangalore topping the chart.
 
Responsible factors such as improving infrastructure and migration of talent led to the emergence of commercial districts and business parks. This, in turn, generated employment opportunities in abundance and a burgeoning population influx in these cities, as a consequence of enhanced employment, opened up significant real estate opportunities.
Report:
 
As per recent research by ANAROCK Property Consultants, the overall unsold inventory of luxury homes (priced Rs1.5cr – Rs2.5cr) declined by 12% to 42,650 units in Q1 2019 from 48,300 units in Q1 2018. Bangalore led from the front, recording a significant 49% reduction in unsold luxury stock within a year – from 6,370 units in Q1 2018 to 3,260 units in Q1 2019. Bangalore was followed by Kolkata with a 37% decline in unsold luxury stock, and NCR & MMR each witnessing 7% yearly decline.
 
Concurrently, unsold stock in the affordable segment saw an increase of nearly 3% as maximum new launches catered to this segment during the period.
 
Report:
As per recent research by ANAROCK Property Consultants, the overall unsold inventory of luxury homes (priced Rs1.5cr – Rs2.5cr) declined by 12% to 42,650 units in Q1 2019 from 48,300 units in Q1 2018. Bangalore led from the front, recording a significant 49% reduction in unsold luxury stock within a year – from 6,370 units in Q1 2018 to 3,260 units in Q1 2019. Bangalore was followed by Kolkata with a 37% decline in unsold luxury stock, and NCR & MMR each witnessing 7% yearly decline.
 
Concurrently, unsold stock in the affordable segment saw an increase of nearly 3% as maximum new launches catered to this segment during the period.
 
The author, Srinivasan Gopalan is CEO, Ozone Group

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