Affordable housing, something that is marked as a housing unit of around 60 sq mt and is priced at Rs 45 lakh or below in metropolitan cities such as Delhi-NCR, Mumbai, Kolkata, Bengaluru, Chennai and Hyderabad, is a rather difficult segment, considering the soaring land prices, explained Nirupa Shankar, Executive Director at Brigade Group.
Shankar was in conversation with Irfan Razack, Chairman & MD of Prestige Group, and Karan Virwani CEO of WeWork India on Nikhil Kamath’s podcast ‘WTF is with Nikhil Kamath’ in the latest episode ‘WTF are Indian Real Estate Giants Up To?’
Razack, Shankar and Virwani discussed how the classification of the segments in itself is debatable, especially when real estate prices fluctuate as often as they do. Shankar said that the affordable segment is really the toughest.
“It is very hard to do so-called affordable housing. Affordable housing is defined as some Rs 45 lakh – plus everything almost comes up to Rs 60 lakh – the way land prices are going it is very difficult to do affordable housing. In the same report (Knight Frank), it will show that affordable housing will have dropped by 50 per cent,” she said.
Kamath had spoken about the classification of housing segments, according to a recent Knight Frank report. It classified affordable as below Rs 50 lakh, with a market share of 27 per cent, mid-premium segment ranging Rs 50 lakh to Rs 1 crore with 32 per cent, and luxury with Rs 1 crore and above at 41 per cent.
Razack said that the split is a bit skewed. “It is lopsided. Luxury will always be in the 15-20 per cent, mid segment would be 50 per cent, and the balance would be the affordable segment,” he added.
Shankar added, “If you talk about luxury, at least the way the builders do it is: above Rs 3 crore is luxury, Rs 1.2-3 crore is upper mid premium, Rs 90 lakh-1.2 crore is mid premium, and Rs 40-60 lakh is affordable.”
Razack said that the real estate classification should not be based on the price but rather on the size of the house. “The price can always keep changing, always base it on the size of the house and then of course it is the overall affordability in terms of the ticket size,” he said.
“If you ask me what is the fastest selling or what is evergreen, then it is Rs 75 lakh to maximum Rs 2 crore. It will get lapped up within no time. The next is Rs 2-5 crore, which is a more difficult range, then above that is for people like Nikhil Kamath,” quipped Razack.
