Big city houses out of middle income group reach

Big city houses out of middle income group reach
The Times of India, August 14, 2009, Page 11

Anshul Dhamija, TNN

BANGALORE: Mumbai, the National Capital Region (NCR) and Bangalore have been found to be the most unaffordable locations for housing for India’s middle-income groups (MIGs).

MIGs, defined as households with annual incomes between Rs 3 lakh and Rs 10 lakh, are unlikely to find their desired kind of homes anywhere close to the city centre in these three metros, according to a study by global property consultancy firm Knight Frank. On the other hand, Kolkata, Pune and Chennai are seen to offer a good number of affordable locations to MIGs.

The study first looks at the factors most important to a consumer in his house buying decision and his budget, and then tries to find locations where these conditions are met. “Mumbai has the worst case scenario for affordable homes. On average, MIGs would have to stay at a distance of 45 km away from the CBD, in areas that have poor connectivity and scant infrastructure, in order to get their ideal affordable home,” says Ghulam Zia, national director in Knight Frank.

This is due to the fact that land prices in the city are so steep that even smaller size units — of about 600 sqft that are acceptable to Mumbaikars — wouldn’t be affordable to MIGs. So buyers will have to settle for places like Panvel, Virar and Kalyan.

Similarly, in NCR, due to the high cost of land, MIGs would have to look beyond Meerut and Sonepat for affordable homes.

In Bangalore, MIGs are seen to be highly concerned about connectivity to their office. “And the problem in Bangalore is that as one starts to move away from the city centre, road and other necessary infrastructure starts to deteriorate,” says Zia.

The survey found that MIGs of Bangalore preferred residential units ranging between 850 sqft and 1,050 sqft in size. Given this preference for large units, very few locations in Bangalore would be affordable for consumers in the Rs 5 lakh to Rs 8 lakh income bracket. Affordable locations include Kanakapura Road, Hebbal, Electronics City, BTM Layout and Whitefield, where it would be possible to find units costing between Rs 15 lakh and Rs 30 lakh.

However, there is seen to be no location in the city at all that can accommodate affordable homes for the income group of Rs 3 lakh to Rs 5 lakh.