Demand for budget houses keeps pace with soaring interest rates
When soaring interest rates have done little to discourage buyers from going all out to book affordable houses, the lack of adequate units in the mid-budget category has disappointed prospective buyers drastically
When soaring interest rates have done little to discourage buyers from going all out to book affordable houses, the lack of adequate units in the mid-budget category has disappointed prospective buyers drastically.
Real estate experts blame big builders for the crisis, as they did not select the right areas while carrying out low-budget projects.
Mid-segment builders, who introduced this genre of housing to the common man, mostly on the city outskirts in the beginning of 2009, are now reaping the benefits of surging demand.
Taking a leaf out of their books, the big names in the industry have initiated several similar projects. So why is there a major demand and supply mismatch?
"All the big builders, who have come up with projects in the low/mid-housing segment, have erred in selecting the right location," said real estate expert C M Jagadish.
He added, "The concept of affordable housing here is quite different from that of Mumbai or Delhi.
Even a new developer in our market today offers houses under the tag of 'affordable', but with a price tag that is contradictory to its tag. Ideally, an affordable house should be priced between Rs 2,000 and Rs 2,500/sft.
But Bangalore offers affordable houses at Rs 3,000 to Rs 4,000/sq ft."
With more builders setting up base in north and south Bangalore, buyers are actively interested in these projects.
"We have an important project in the low-segment sector and are getting good feedback from buyers. When it comes to affordable housing, location is as important as pricing.
However, although demand is high, we find that buyers often delay making final decisions due to high interest rates," said Snehal Mantri, director (marketing), Mantri Developers.
In addition, other residential builders have many projects in the pipeline, primarily in the North and South zone of the city.
"East Bangalore is costlier, which is why many projects are coming up in other zones of the city.
Many builders have good projects coming up, so in the next few years, the city will become a hub for affordable houses," said another real estate expert.