Hi Javed, As apartments sales in the middle and high income segments are showing no signs of improvement, many builders are seriously stopping big project & looking for plots to start budget homes. Budget homes is something which will be suitable for lower income & middle income group people.
In my point of view, this is a segment which most builders have ignored, but those who have ventured into it say they have nothing to complain. Identifying develop-able land at the right price in the right place is the key to success of a budget housing project.
Going by the experience of developers who promote budget housing projects, they are by and large cash-surplus projects as long as the promoter sticks to medium sized developments in the range of 2-3 acres. Many newcomer to real estate market having a dream of own home or investment may be getting attracted by this cash flow.
@ Mr Javed, According to me, you can raise funds from the market (customers) and do projects. As long as the budget housing segment is treated as a separate entity and the money collected for it is used for the same project, it will work. But if the money is diverted to service bad loans or to complete other stuck projects, then things will miserably go wrong.
As per my knowledge, due to low margins, many builders are not showing any interest in the affordable housing segment for years. So high volumes are required to make a significant profit, comparable with projects of higher capital values and larger unit sizes. Builders have gone wrong in the past by increase prices unusually and keeping apartment sizes unwieldy.
In my point of view, slow pace of employment generation in the IT sector and retrenchment of several thousand people in the manufacturing sector, especially in the Sriperumbudur belt, have badly affected Chennai realty.