Realty developers bet on affordable housing to beat note ban blues
Tata Housing, Shapoorji Pallonji, Mahindra Lifespaces and Wadhwa Group are on course to launch affordable housing projects in early 2017.
Mumbai: Affordable housing has dodged the demonetisation bullet,a slew of upcoming project launches shows, even as high-end housing staggers following the shock withdrawal of high-value currency notes.
While several premium and luxury developers have deferred launches, Tata Housing Development Company Ltd, Shapoorji Pallonji Real Estate, Mahindra Lifespaces Developers Ltd and The Wadhwa Group are on course to launch affordable housing projects in the first three months of 2017. Smaller firms such as Brick Eagle and Emgee Group also expect to launch such projects in January.
According to property advisers and builders, demonetisation has affected affordable and middle-income housing the least, thanks to fewer cash transactions and the predominance of bank finance in this segment. They also believe with land prices expected to soften, many developers will find affordable housing attractive.
“We are launching our second affordable project in Mumbai in a month’s time as per our plans. Affordable housing would not be impacted much because a person who buys affordable house is a typical salaried person or a person who is starting out in life. Both these categories are the ones who buy houses through a housing loan and through their salary savings. So, for them, demonetisation is irrelevant,” said Jai Mavani, executive director, Shapoorji Pallonji Group.
The firm, which entered the affordable housing space last year with its Joyville brand, is planning to launch two more projects each in Mumbai and Pune in early 2017. Both these projects will have 3,300 units.
Apartments at its first Joyville project in Kolkata cost Rs20-45 lakh.
Similarly, Tata Value Homes, a subsidiary of Tata Housing Development Company Ltd, is close to tying up with Noida-based Lotus Greens Developers Pvt. Ltd for its second affordable housing project in the national capital region (NCR), according to a company official who did not want to be identified.
The project, to be built over 20 acres, is expected to launch by January, the person said.
A two-bedroom apartment in this project will cost around Rs55 lakh.
Besides, Mahindra Lifespaces Developers Ltd, a unit of Mahindra group, is planning to launch its third affordable housing project, Happinest, with around 700 units at Palghar in Mumbai in the next three months.
Ashutosh Limaye, research head at JLL India, a property consultant, said launches in the affordable space are expected to increase by next year as the segment provides a “good business proposition on a long-term basis” because of the growing demand.
Secondly, the effect of demonetisation on land prices will be visible by the second half of next year, fuelling more launches during the period.
“More developers are looking for affordable housing in the last few months as this is a safer category. It has anyway been selling at a steady rate. And since it is largely driven by end-user demand, there is not much of up and down movement because of demonetisation,” Limaye said.
Brick Eagle Capital, a financial services platform that funds and advises low-cost housing developers, said it is going ahead with its plan to launch one affordable housing project each in Coimbatore and Pune by January and February, respectively.
“There is a huge demand for housing in the Rs10-30 lakh price points. While the overall real estate sector has been affected (due to demonetisation), for affordable segment, the market is still on. It’s business as usual for us,” said Rajesh Krishnan, founder and chief executive, Brick Eagle.
Mumbai-based luxury property developer Emgee Group is entering the affordable housing with its first project at Nerul in Navi Mumbai in January, followed by a second one at Shahpur in Nashik by April.