Following in the footsteps of Tata Group and Unitech, the Future Group has also
entered in to affordable or low-cost housing projects. Future Group's unit FH
Residencies has formed a joint venture with Kolkata-based developer Sumit
Dabriwal, for building affordable, branded, ready-to-move-in homes.
Kishore Biyani, founder and chief executive, Future Group said it intends to be
a Rs130 billion company by 2011 and the foray into building ready-to-move-in
houses is part of the plan. The company has yet to work out the pricing
strategies, but it would be affordable.
This is a national tie-up with Sumit Dabriwal and the target buyers would be
young, working class, who are pressed for time, so we would take care of
everything needed for a home, Biyani said.
One more cash rich group entering into low-cost housing project is good news,
but there are some concerns about the theme itself.
In his recent letter to shareholders, Deepak Parekh, chairman, Housing
Development Finance Corp (HDFC), said: "Affordable housing is not about
box-sized, budget homes in far-flung places where there is no connectivity to
work places and little surrounding infrastructure. Affordable housing has to be
able to cut across all income segments and has to make economic sense in terms
of proximity to the work place. The agenda for affordable housing requires
combined public-private collaboration and a strong political will to enforce
Developers have recognised that the real demand no longer lies in the premium
segment and are therefore opting to build smaller, no-frill apartments.
'Affordable housing' is suddenly in vogue. But this is a bit of a misnomer.
Some correction in prices has happened, developer margins have come off, but
real estate prices are still high, he added.
An industry associate has suggested the government and realty players should
jointly undertake low cost housing projects in rural areas where shortage of
houses is estimated to be more than 47.43 million up to 2012.
Developers are now reintroducing one-bedroom apartments, which seemed to have
disappeared from the market. Further, with interest rate reduction, many who
were earlier out-priced are now able to come back into the housing market.
While these developments are positive, the real agenda for affordable housing
has still not been brought to the table, Parekh said.
Talking about the shortage in affordable urban land, Parekh said the inability
to adjust land policy with the changes in demand and supply conditions has led
to serious shortages of urban land at affordable prices, encroachments on
public and private lands, irrational land use and absence of spatial plans in
The total urban land stock in India is only 2.3% of the country's total
geographical area, but houses 30% of the country's population.
Parekh said there is a need to bring in additional urban land on a regular
basis through a policy change and the floor space index (FSI) should be
increased at the same time urban infrastructure should also be upgraded.
Talking about the role of housing boards in the development of houses, the HDFC
chairman said although some state housing boards are performing their duties,
in recent period many of them have shifted their focus to merely selling land
for profit and sitting on cash surpluses. Such profits should be mandatorily
ring fenced and deployed only for affordable housing, he added.
Separating challenges of urban housing from rural housing, Parekh said the
government need to go for key reforms like permitting the mortgage of
agricultural land for residential purposes and introducing title insurance
which could give the much-needed thrust to rural housing.
There is such a compelling need for state level real estate regulators whose
role would be to oversee and monitor the affordable housing agenda, promote
real estate reforms, ensure transparency especially by mandating that flats be
sold only based on carpet area and most importantly, act as a platform to
protect buyers from real estate fraud, the HDFC chairman said. -Yogesh Sapkale [email protected]