Smaller, cheaper flats to revive housing demand, says Parekh
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.