Affordable Housing Is The New Choice

Between 2003 and 2007, the real estate sector, both commercial and residential segments, had a boom, seeing a runaway rise in price, growth and profits. Realty companies were focusing more and more on luxury apartments. The base sizes of houses became larger. Small house segment was ignored completely. High consumer confidence, low interest rates and a belief that the prices will only one-way, led to this euphoria.
Several construction companies raised large sums of money through IPOs. After the January 2008 crash, the real estate stocks are among the worst affected.
Whereas, the stocks were down, the prices of houses and real estate have not seen any appreciable corrections, although precise information is hard to come by on this sector. Business World reports that in Mumbai recently, Bandra Kurla complex, a piece of commercial estate got only Rs 15,000 per square feet against Rs. 40,000 for a similar property in 2007.
One visible indication of the slowdown in the residential segment is the announcement of affordable housing projects by the big builders, who were hitherto only concentrating on the luxury segments. With rising prices and interest rates, the demand for luxury apartments (Above Rs 50 lakh per apartment) has dramatically come down.

2 Comments

  1. Posted September 15, 2008 at 2:53 am | Permalink

    Provident Housing and Infrastructure, the wholly owned subsidiary of Bangalore-based real estate company, Purvankara Projects, is planning to raise Rs 750 crore through private equity funds. The funds would be used to acquire land for its affordable housing projects. “Total project cost is Rs 8, 000 crore. Of this, Rs 750 crore will be raised through private equity funding at the project level. While one is an Asia-based fund, the remaining three are from the US,” a source close to the development said. The remaining Rs 7, 250 crore would be raised through a mix of internal accruals, debt and customer advances. He added that the company could also dilute between 30 and 40 percent stake in each of the affordable housing projects.For more view- realtydigest.blogspot.com

  2. Economical Houses Pune
    Posted September 15, 2008 at 5:01 am | Permalink

    Yeah i agree,
    with real estate prices so high and the interest rates soaring, this situation was bound to be faced.
    Buying luxury homes is not within the reach of the average middle class person, atleast not in this situation, so affordable homes and small bachelor homes are the ” IN ” thing these days.
    I think more and more townships with economical and smaller houses should be made to cater to this new trend.

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