Affordable homes realty’s knight in shining armour

Affordable homes realty’s knight in shining armour
The Economic Times, October 22, 2009, Page 1

Ravi Teja Sharma & Arun Kumar NEW DELHI

EKAM and Roma Bansal’s (names changed on request) dream of owning a home came true last month when they booked a 12th-floor two-bedroom apartment on the Greater Noida Expressway, near Delhi. They will be paying about Rs 30 lakh for the flat, of which some Rs 20 lakh will be financed by a bank loan.

The Bansals are thanking their stars that they failed to seal a deal in the past two years they were looking to buy an apartment. Home prices in the national Capital region (NCR) are currently down a third from their peak at the end of 2007 and the economic slowdown has forced property developers to slash prices and build cheaper, compact homes that fit the budget of people like the Bansals.

Their builder, Unitech, India’s second-biggest real estate company, was down in the dumps earlier this year as real estate prices crashed and buyers disappeared. The property developer is now patting itself on the back after deciding to launch “affordable” homes, the relatively lower-priced apartments that are attracting buyers.

Unitech says it sold 8.16 million sq ft of residential space between March and September out of a total of 10.11 million sq ft, helping it post revenues of Rs 3,913 crore—higher than its top line in the boom years of 2006 and 2007. And all the apartments it sold were in the affordable category, costing less than Rs 30 lakh apiece.

Building affordable homes is paying rich dividends. A survey of India’s top property firms and estimates from industry body Confederation of Real Estate Developer’s Associations of India (Credai) show that over 70 million sq ft of residential space was sold in the first six months (March-September) of the fiscal 2010.