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Affordable housing segment that saw a dip of 52 per cent in third quarter of 2014 across India, has seen a healthy growth in Pune, a city in the western region of Maharshtra.
Real estate consultancy firm Cushman & Wakefield in its recent report reported that the affordable housing segment has witnessed one of its sharpest decline in launches for Q3 2014 as against Q3 2013. This despite the fact the affordable housing segments has one of the highest demand.
Developers in Pune in the affordable housing sector do not agree with findings of the study. According to Cushman & Wakefiled report for the third quarter of 2014 Pune had 500 units compared to zero for the same period 2013. The 500 units comprise 7 per cent of the market. Though these numbers are lower than 5,000 units reported in Q3 of 2012.
Though no one describes what is affordable housing range developers such as Vastushodh, Xrbia and Sangam Group, who are developing affordable houses, have prices in the range of Rs 10 lakh to 25 lakh depending upon the size of the units. Typically in Pune, the affordable homes are of the 1 RK, 1, 1.5 and 2 BHK flats that would range between 356 and 794 square feet that would be priced between Rs 10 lakh and Rs 25 lakh.
Sachin Kulkarni, managing director, Vastushodh Projects said, "Developing affordable housing is a different ball game. In India, tjhere are very few people who are purely constructing only affordable houses. It requires a different set up, infrastructure and equipments as well. As far as Pune market is concern, there is a huge demand for such houses. In the next six months, we are coming up with over 8,000 flats being developed around Pune and 80 per cent of the units are already sold. We have also asked the government to define the 'affordable housing." depending upon every city of the country."
Vastushodh, has its affordable homes under the brand name Anandgram and Urbangram. It has developed over 8 lakh sq feet area only for affordable housing sector and is developing additional four million sq feet area.
Earlier, Vastushodh had joined hands up with ACG Worldwide, largest privately owned producers of pharmaceutical empty hard gelatin and HPMC capsules for a joint development of housing society for ACG Employees and for the development of an 'Urbangram' project on 16 acers of land owned by ACG at Shirwal on Pune-Satara Road.
According to Kulkarni, In Pune, the flats which are priced between Rs 5 lakh to 25 lakh can be defined as affordable homes. The top builders are not very keen to develop these houses due to low profitability. Vastushodh is now also planning to develop homes ranging from Rs 5 lakh to Rs 10 lakh.
"One of the reasons for growth of affordable projects in Pune is the availability of land parcels, especially outside the municipality limits. From the past records too affordable segment as well as senior homes concept has done very well in the region. what is also unique to the region is the availability of projects in all price ranges. For instance, Koregaon Park Waterfront would have a price tag of Rs 16,000 per sq.ft, then Bavdhan would have projects in the Rs 7,000 range", said Sanjay Dutt, MD, South Asia, Cushman & Wakefield.
Another player in affordable housing, Xrbia is developing over 3,000 units around Pune and out of which 1,008 units are ready for possession around Pune like Hinjewadi, Jambhul, Chakan, Madap, Varai & Talegaon. It holds a land bank of 1,200 acres in Pune-Mumbai belt.
Recently city based Sangam Group, who also have projects in the low cost housign segment, announced its partnership with Brick Eagle (BE), a financial services platform for affordable housing, to launch Playtor Childspaces (Playtor). The projects promise to change the social housing landscape in the country by offering homes at Rs 10 lakh. Playtor is launching three projects in the outskirts of Pune: namely Ranjangaon, Rajgurunagar and Paud.
Brick Eagle is investing Rs 30 crore for the total Rs 250 crore project. Brick Eagle currently manages over 1,250 acres of projects which when completed will house over 88,000 families. With Playtor, they are further expanding their commitment towards the social housing development space.
According to BE, the Economically Weaker Section (ES) of the population faces the brunt of this deficit, their share in urban India’s homelessness standing at almost 11 million homes or 56.2 per cent, while that for the LIG (lower income group) is at 7.41 million homes or 39.5 per cent.
"We are kick starting our journey of providing affordable homes with three projects at Paud, Ranjangaon (MIDC) and Rajgurunagar and look forward to setting up similar projects in the outskirts of other metropolitan cities," said Rajesh Krishnan, CEO and managing director, Brick Eagle.
According to Krishnan, there is a huge demand-supply gap in affordable housing sector. The market demand for these homes is of 7 million homes while the industry is developing only one million.
