In­no­va­tion is nec­es­sary

HT Estates - - Property Classifieds -

This will help builders re­cover any ex­tra costs that they may have to in­cur for ac­quir­ing land with­out putting pres­sure on the buy­ers. At present, they are al­lowed 275 apart­ments of 1,000 sq ft each.

The pro­posal of giv­ing more FAR is good and will en­sure that the costs (at least in Noida Ex­ten­sion) do not go up fur­ther than 20%. It will help in av­er­ag­ing the cost of the prod­uct and help check any ex­ces­sive in­crease in prices, says Gaur.

Ac­cord­ing to Subhankar Mi­tra, head - strate­gic con­sult­ing (West), Jones Lang LaSalle In­dia, ris­ing land cost is a se­ri­ous con­cern as far as sta­bil­ity of sup­ply goes, and the prob­lem is only com­pounded by the ex­ist­ing steep costs of fin­ished prod­ucts in the met­ros. How­ever, though de­vel­op­ers can mit­i­gate the cost by launch­ing premium and lux­ury projects, only a small num­ber of buy­ers for such prod­ucts ex­ist. In other words, this route will not prove to be ef­fec­tive for de­vel­op­ers.

De­mand is much higher for the bud­get homes seg­ment of R25 lakh and be­low, which has not seen much sup­ply for var­i­ous rea­sons. If a de­vel­oper tar­gets this seg­ment along with a mix of mid and high-end projects, it will prove to be a win­ning for­mula in the present mar­ket con­di­tions.

The prob­lem is that real de­mand ex­ists in the af­ford­able cat­e­gory. Post the 2008 slow­down, one found de­vel­op­ers re­duc­ing unit sizes to ra­tio­nalise prices to make houses more af­ford­able. “They may again de­cide to come up with smaller con­fig­u­ra­tion,” says Shveta Jain, di­rec­tor, res­i­den­tial, Cush­man & Wake­field. “De­mand for the R30 lakh home is the largest and de­vel­op­ers can­not sur­vive with­out cater­ing to that seg­ment. They will need to do some in­no­va­tion in terms of cost of con­struc­tion, adopt method­olo­gies by way of which these costs can come down and make the prod­uct more af­ford­able and ef­fi­cient,” she adds.

And, there are some de­vel­op­ers who are plan­ning to do ex­actly that. “We are plan­ning to go in for green and pre­fab­ri­cated struc­tures. Even if costs go up (as in the case of Noida Ex­ten­sion), they will be in the fringe of af­ford­able due to this,” adds Anil Sharma, CMD Am­ra­pali Group and vice pres­i­dent of CREDAI-NCR.

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