MIG Buyers On Target Of Real Estate Firms Like Shapoorji, Hiranandani & Puravankara
Developers like Shapoorji Pallonji Real Estate, Hiranandani Group and Puravankara Projects Ltd. have launched mid-income housing projects recently. As with low-income homes not fetching enough margins and luxury homes not finding enough takers, builders have found a sweet spot in MIG buyers who are willing to put up Rs 25-50 lakh for a home of their own.
More and more builders are now trying to build in the MIG (middle-income group) price bracket because they have the right balance of high demand and profitability of margins. It is tough for private developers to maintain the margins in LIG (low-income group) housing.
However, one needs to venture into it as a long-term, 6-10 year business, and not just as a market reaction, said chief executive officer, Shapoorji Pallonji Real Estate, part of the Shapoorji Pallonji Group, which builds Rs 30-60 lakh homes.
With the challenges of building LIG homes becoming clearer far-off project locations, poor infrastructure, low margins, mortgage unavailability – convenience of location, compact homes and pricing have attracted MIG buyers. For builders, the segment offers profitability and sales volumes at a time of unprecedented slowdown in the real estate sector.
Hiranandani Communities, which has two integrated townships in Panvel and Chennai, plans to build 2,000, 500 sq. ft homes for Rs 30 lakh each at Hiranandani Fortune City, Panvel. Hiranandani has always been associated with building premium and luxury homes so far.
In the July-September period, a total of 64,781 residential units were sold across the top eight cities, of which 23,493 units were in the Rs 25-50 lakh price category and 12,136 in the below Rs 25 lakh category, according to Liases Foras Real Estate Rating and Research Pvt. Ltd. There is fair demand for homes in the Rs 50 lakh to Rs 1 crore category as well, with 18,682 units sold, the report said.
Interest subsidy on home loans for MIG households was announced in September. In November, the Union cabinet increased the carpet area of houses under the government’s affordable housing scheme which can help homebuyers, with annual income between Rs 6 lakh and 18 lakh, access bigger, ready-to-move-in houses at lower costs.
Entrepreneur who heads VBHC Value Homes Pvt. Ltd, which started off with low-income housing projects, believes that one and two-bedroom homes are now preferred by buyers.
Realty firms like Shriram Properties Ltd and Ruparel Realty have multiple project launches planned in the coming months in 2018.
Bengaluru’s Puravankara Projects Ltd, under its value housing firm Provident Housing, plans to launch 9-10 million sq. ft of homes in the Rs 30-50 lakh segment in southern India.
Building homes below Rs 20 lakh is a huge challenge in terms of infrastructure. Mid-income homes work well for buyers because developers are also getting more rational and building what customers want today and at prices that they can afford, said chief executive and managing director, ASK Property Advisors.
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