Smaller, cheaper flats to re­vive hous­ing de­mand, says Parekh

The Times of India (New Delhi edition) - - Times Global - Nauzer Bharucha & Mayur Shetty

Mum­bai: At a time when the real es­tate mar­ket is in a slump, half a dozen af­ford­able hous­ing pro­jects fi­nanced by HDFC’s $1.1-bil­lion real es­tate fund have sold be­tween 50% and 100% of the in­ven­tory, HDFC chair­man Deepak Parekh said on Mon­day. “The key to suc­cess is the right price, right size and right de­vel­oper,” he told TOI.

Go­drej Prop­er­ties, which launched a 1,190-apart­ment com­plex in Pune in March, on land bought by HDFC’s fund, saw 71% of the apart­ments be­ing booked at an av­er­age Rs 5,200 per sq ft. Even among end users, the de­mand is in the af­ford­able seg­ment where builders get tax ex­emp­tion and buy­ers get a credit-linked sub­sidy from the gov­ern­ment. “The de­mand in this seg­ment is in­sa­tiable,” said Parekh.

An­other af­ford­able project by Mahin­dra Lifes­pace in Boisar, where the av­er­age price was Rs 3,200 per sqft and launched last year, has 90% of apart­ments booked in the un­der­con­struc­tion prop­erty. While HDFC as a hous­ing fi­nance com­pany can­not in­vest in land, the HDFC Cap­i­tal Af­ford­able Real Es­tate (HDFC CARE) fund in­vests in pro­jects in part­ner­ship with re­puted names.

“We are in talks with a re­puted de­vel­oper to develop land at Chem­bur to con­struct 2,000 units of hous­ing — 40-90 square me­ters start­ing at Rs 65 lakh. This is a prop­erty that will be10 min­utes away from BKC,” said Vipul Roongta, man­ag­ing di­rec­tor of HDFC Cap­i­tal Ad­vi­sors which man­ages the HDFC CARE Fund.

Out­side Mum­bai, the fund has had an even bet­ter ex­pe­ri­ence. In July this year, HDFC­funded Sig­na­ture Global launched a res­i­den­tial project in Gur­gaon com­pris­ing 754 units, all of which were sold out soon af­ter launch. Be­sides hav­ing the as­sur­ance of HDFC as a fi­nancier, a unique fea­ture of these apart­ments was that they were all priced be­tween Rs 3,200 and Rs 5,000 per sqft.

Ac­cord­ing to Anarock Prop­erty Con­sul­tants chair­man Anuj Puri, data in­di­cates that av­er­age apart­ment sizes in the top seven ci­ties have shrunk by 27% over the last five years — from 1,400 sqft in 2014 to nearly 1,020 sqft in 2019 so far.

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