With the city extending towards new peripheries, residential development has also grown to accommodate the requirements of a burgeoning working population. As large multinational establishments are finding spaces in far-flung localities, the demand for housing in these belts has picked up. Reasonable cost of land has led to the emergence of the affordable or budget housing segment to cater to a younger, first time buyer profile coming to the city.
Kalpana Murthy, Associate Director – Residential Services, India, Cushman & Wakefield, elaborates, “Although the development of affordable housing by the Karnataka Housing Board in the city dates back to more than a decade, the affordable segment offerings from private developers gained prominence post 2009. Peripheral areas of south Bangalore such as Chandapura and Anekal Main Road were among the first locations to witness affordable housing projects due to their proximity to the industrial belts of Jigani, Attibele, Bommasandara, Hosur and the IT hub of Electronics City.”
Emergence of affordable housing
The concept of affordable housing has changed in terms of product, price and number of options. Over a period of time, the residential market has acknowledged affordable segment as a distinct product offering.
Murthy explains, “Developers have started looking at this segment seriously, offering projects at peripheral locations, enhancing space utilization of the residential units and providing additional amenities in these projects. In 2009-10, residential units were offered in the range of Rs 15-20 lakhs which have, over a period of time, owing to rising land, labor and construction costs, now gone up to Rs 40 lakhs.” Although mid-segment projects continue to be the focus, the affordable segment has seen traction by prominent developers of late, mainly in the peripheral regions owing to lower land costs that limit input costs considerably.
Santhosh Kumar, CEO – Operations, Jones Lang LaSalle India, says, “Presently, to get a reasonable option in the budget or affordable segment, you would have to look at properties ranging from Rs 25-40 lakhs. Today, the higher disposable incomes of working professionals enables them to purchase a first home of Rs 40 lakhs easily.”
Factors leading to growth
Skyrocketing real estate prices of mid-segment and high-end properties located in central and suburban areas, and prolonged demand for housing options in this category, have fuelled the rise of this segment. The continued influx of a large working population and high unrealized demand for residential units in this segment is anticipated to provide impetus for growth of the affordable segment in future as well.
“Nearly 40 percent of the total launches in the city in the current year have been in the affordable segment,” says Murthy. “The demand is essentially driven by the young IT workforce who would like to save their initial earnings. With a disposable income of Rs 10-15 lakhs, they would prefer to park their funds in this kind of an option since the stock markets are not doing too well,” Kumar adds.
Locations gaining prominence
Research by JLL indicates that areas with high concentration of budget housing are Old Madras Road, Peenya owing to the presence of a large workforce, Attibele-Anekal Road, Electronics City, and Sarjapur Road due to the concentration of the IT workforce. A single bedroom or studio is usually around 550-600 sq ft and a double-bedroom around 700 sq ft.
According to Murthy, the presence of the Peenya industrial belt, the upcoming Metro line and proximity to the airport have provided impetus to affordable housing in Devanahalli, Doddaballapur Road, Yelahanka, Thanisandra and Tumkur Road. The upcoming Hoskote-Narsapur industrial belt and proximity to the IT hub in Whitefield has led to the growth of budget options in Budigere Cross and Kadugodi.
The industrial belts of Jigani, Attibele, Bommasandara, Hosur Road and connectivity to IT hub of Electronic city has driven the affordable segment in Sarjapur Road, Kanakapura Road and Attibele-Anekal Road. The Kumbalagodu-Bidadi industrial belt and connectivity via NICE Ring Road have provided an impetus in Mysore Road, Kengeri and Uttarahalli Road.
Source: Times Property, The Times of India, Bangalore