Big builders are ‘going small.' A raft of affordable housing projects in the city's suburban pockets underlines this shift in focus. Used to catering to the high-end market in plush downtown areas, property developers are beginning to tap into the rising demand for budget apartments — which may be small in space but which make no compromises on quality.
A phenomenon driven by the recent recession in the property market? Not entirely, say the builders, who argue that a slew of other factors have contributed to it.
The availability of vast parcels of land in the suburbs, at relatively lower prices, have made it possible for builders to offer apartment complexes that provide a lifestyle — with such things as green spaces, club houses, jogging tracks and swimming pools. “Only projects that are located on large chunks of land can offer such amenities,” says Nakshatra Roy, director, Corporate Operations, True Value Homes. “In the suburbs, it is possible to do this very affordably.”
Price band
Such projects broadly fall within the Rs 2,100 to Rs. 2,800 per square foot range. With single bedroom and compact two bedroom apartments on offer, you can get an apartment for under Rs. 15 lakh and enjoy the general amenities that the block provides.
Everyone seems to be playing the ‘small is beautiful' game. Last year, Akshaya Homes, a player in the premium, luxury apartment segment, tried its hand at small, affordable housing. Its Adena project at Kazhipattur (near Padur on Old Mahabalipuram Road), offered 199 apartments in the 600-1000 sq.ft range (“The apartments were sold out in three days,” says T.Chitty Babu, Chairman, Akshaya Homes). True Value Homes' 832-apartment project, TVH Svaya in Sriperumbudur, offers living spaces of 585 sq.ft and 880 sq.ft for sale. VGN is all set to launch a 700-apartment project near Ambattur, with a starting price of Rs. 10 lakh for a flat. Dugar Housing Ltd's Dugar MME Gold City at Thiruporur (on Old Mahabalipuram Road) offers 550 sq.ft apartments priced at Rs. 10 lakh to Rs. 11 lakh. Vijay Shanthi Builders has launched three affordable housing projects in the outskirts — ‘Lotus Pond' in Kelambakkam has, apart from their regular apartments, budget-sized flats that range between 372 sq. ft. and 836 sq.ft.; ‘Park Avenue' on the Kelambakkam-Vandalur road includes a category of 490 sq.ft. to 530 sq.ft. apartments; ‘Infiniti' in Mevalurkuppam (Sriperumbudur) offers similar categories.
Market reality
For builders, small flats widen the range of the offer as well as provide a peg to advertise their project as one providing extremely affordable housing. With a burgeoning group of middle-income earners in the city, the need for such housing is on the rise. “Affordable housing comprises 60 per cent of the market,” says Suresh Jain, managing director, Vijay Shanthi Builders. Demand for houses in the 500 sq.ft. to 700 sq.ft. category is not new, says Roy, adding that market realities have now forced big builders to concentrate more on this segment.
Says Suresh: “When the economy was buoyant and the property market started picking up in 2003, demand for 1500 sq.ft. to 3,000 sq.ft. apartments was high. Big builders did very well by just catering for this segment. But when the high-income group was hit by recession, builders had to widen their horizons. They automatically turned to the financially more stable middle-income group that looks for small, but comfortable houses.”
According to Padam Dugar of Dugar Housing, “Big builders focussed on the IT sector and other high-income groups and ignored the middle income group. Their mistake became obvious during the recession. Small builders coped better with the recession because they had been focussing on the middle-income segment.”
“It does not make sense any more to build two apartments in Poes Garden and 10 in the Boat Club area. Volumes have begun to matter,” says Pratish Devadoss, managing director, VGN.
As profit margins in budget apartments are relatively thin, builders adopt newer construction strategies and technologies and draw up more meticulous plans. Use of pre-fabricated material, careful management of the supply chain and work schedules to avoid delays are vital to keeping costs down, says Roy.
While budget housing may not allow for a swanky club house, it can provide a functional one, says Pratish. “But at least buyers won't be denied any of the main facilities that are part of gated community living.”
The availability of budget apartments in big housing complexes developed by well-known builders also provide customers with a good address — something they value. Evidently, they are willing to compromise a little on space in exchange for a promise of greater quality and a better lifestyle.
