Riding the affordable luxury wave
23 Nov 2015
Open any newspaper today, or drive down any of our main highways, and you’ll be flashed every few pages or meters with an ad or hoarding for a real estate project. Fair enough, that’s been the case for some years now. What’s heartening though is that most of these are for homes in the mid-range luxury segment, one that did not really exist until a few years ago. There was luxury housing, and there was LIG, or Low Income Group, housing, nothing really sat in between; maybe there wasn’t really a demand for it till the early 2000s. But an unprecedented level of urbanisation, the burgeoning of an affluent, educated, travelled and salaried class of consumer- the Millennial, has led to the demand for a more sophisticated version of affordable housing. So the emergence of this segment can be seen as builders awakening to the writing on the wall, or an idea whose time has come; either way, it is where all the real estate action’s at.
According to Apurva Gupta, Sr. Vice President - Sales, Vijay Group, “The Pan-India residential property market is demanding mid-segment houses across metros & mini metros like Mumbai, Delhi, Bangalore, Ahmedabad, Baroda, Hyderabad, Chennai, Gurgaon, Pune, Aurangabad and Nashik too. This demand is in proportion with the growing infrastructure and expansion along the smart cities concept of the ruling government.”
The Millennial, while wanting a luxurious lifestyle, wants it with minimal waste and maximum efficiency - getting the most bang for his or her buck. Today, builders are facing buyers as young as 25, possibly a young double-income couple with ready access to credit. They look not just to invest in one home to reside in, but they’re then likely to look out for a 2nd home as an investment. They research hard, are tech-savvy, well-informed about prevalent market situations andhousing trends, are aware of their bargaining power and know how to exercise it. Builders have had to learn to flex and accommodate the needs of this savvy set, and have altered their offerings to cater to the fluid requirements of the millennial buyer.
Today, you can shop around for configurations like 1.5 and 2.5 BHKs, or find compact 1BHKs in 400 to 450 sq. ft. closer to your desired locality, and most hearteningly, builders are accommodating of a degree of customisation that just wasn’t available to buyers earlier. Each apartment was a cookie-cutter version of the one beside it/below it in the building. Not any more, says Gupta, “Home buyers are no longer content with the pre-designed homes being offered by developers. They want more flexibility and control over how their apartments will eventually look. In order to allow home buyers to customize their apartments, developers are offering homes where buyers can select their own layout, floors, kitchen and several other aspects.”Builders in the mid-range segment are also expected today to be aware of, and provide for, lifestyle and environmental amenities like security systems, water recycling units, rain-water harvesting, solar-heaters, high-end bath fittings, club-houses, etc.
What’s more we’ve seen the creation of whole townships and infrastructure built around the projects that come up, leading to new neighbourhoods sporting supermarkets, schools, parks, banks, clinics and/or hospitals in the peripheries of Tier I, II and even Tier III cities. Deepak Goradia, Vice Chairman and MD, Dosti Realty Ltd endorses this view, “The emergence of the new segment, mid-end housing segment, has extended the growth of luxury projects and increased buyer’s interest to invest in such projects. These projects are generally large integrated townships having lot of open spaces with social infrastructure in place like schools, hospitals, hotels, retail malls etc., all within easy reach for the residents.”
Finally, affordable housing might be seen by builders as a stop-gap to tide over the presently sluggish real estate scenario, and they may be biding time with offerings in the space till the market picks up and they can focus once more on ultra-high-end offerings for the price-agnostic HNI buyer/investor, but that would be a mistake. India’s growth story will see the need for focussed development of more offerings in the mid-range, and LIG housing, for quite some time to come, if it is to meet the government-backed goals of “Housing for All by 2020”. For now anyhow, the millennial buyer is having his day in the sun, and would do well to ride the wave of quality offerings in the affordable luxury home space while it lasts.