With the city extending towards new peripheries, residential
development has also grown to accommodate the requirements of a burgeoning
working population. As large multinational establishments are finding spaces in
far-flung localities, the demand for housing in these belts has picked up.
Reasonable cost of land has led to the emergence of the affordable or budget
housing segment to cater to a younger, first time buyer profile coming to the
city.
Kalpana Murthy, Associate Director – Residential Services,
India, Cushman & Wakefield, elaborates, “Although the development of affordable housing by the Karnataka
Housing Board in the city dates back to more than a decade, the affordable
segment offerings from private developers gained prominence post 2009.
Peripheral areas of south Bangalore such as Chandapura and Anekal Main Road
were among the first locations to witness affordable housing projects due to
their proximity to the industrial belts of Jigani, Attibele, Bommasandara,
Hosur and the IT hub of Electronics City.”
Emergence of affordable housing
The concept of affordable housing has changed in terms of
product, price and number of options. Over a period of time, the residential
market has acknowledged affordable segment as a distinct product offering.
Murthy explains, “Developers have started looking at this
segment seriously, offering projects at peripheral locations, enhancing space utilization
of the residential units and providing additional amenities in these projects.
In 2009-10, residential units were offered in the range of Rs 15-20 lakhs which
have, over a period of time, owing to rising land, labor and construction
costs, now gone up to Rs 40 lakhs.” Although mid-segment projects continue to
be the focus, the affordable segment has seen traction by prominent developers
of late, mainly in the peripheral regions owing to lower land costs that limit
input costs considerably.
Santhosh Kumar, CEO – Operations, Jones Lang LaSalle India,
says, “Presently, to get a reasonable option in the budget or affordable
segment, you would have to look at properties ranging from Rs 25-40 lakhs.
Today, the higher disposable incomes of working professionals enables them to
purchase a first home of Rs 40 lakhs easily.”
Factors leading to growth
Skyrocketing real estate prices of mid-segment and high-end
properties located in central and suburban areas, and prolonged demand for
housing options in this category, have fuelled the rise of this segment. The
continued influx of a large working population and high unrealized demand for
residential units in this segment is anticipated to provide impetus for growth
of the affordable segment in future as well.
“Nearly 40 percent of the total launches in the city in the
current year have been in the affordable segment,” says Murthy. “The demand is
essentially driven by the young IT workforce who would like to save their
initial earnings. With a disposable income of Rs 10-15 lakhs, they would prefer
to park their funds in this kind of an option since the stock markets are not
doing too well,” Kumar adds.
Locations gaining prominence
Research by JLL indicates that areas with high concentration
of budget housing are Old Madras Road, Peenya
owing to the presence of a large workforce, Attibele-Anekal Road, Electronics
City, and Sarjapur Road due to the concentration of the IT workforce. A single
bedroom or studio is usually around 550-600 sq ft and a double-bedroom around
700 sq ft.
According to Murthy, the presence of the Peenya industrial
belt, the upcoming Metro line and proximity to the airport have provided
impetus to affordable housing in Devanahalli, Doddaballapur Road, Yelahanka,
Thanisandra and Tumkur Road. The upcoming Hoskote-Narsapur industrial belt and
proximity to the IT hub in Whitefield has led to the growth of budget options
in Budigere Cross and Kadugodi.
The industrial belts of Jigani, Attibele, Bommasandara,
Hosur Road and connectivity to IT hub of Electronic city has driven the
affordable segment in Sarjapur Road, Kanakapura Road and Attibele-Anekal Road.
The Kumbalagodu-Bidadi industrial belt and connectivity via NICE Ring Road have
provided an impetus in Mysore Road, Kengeri and Uttarahalli Road.
Source: Times Property, The Times of India, Bangalore
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