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Builders expect affordable housing projects to be the most desirable among buyers in Bengaluru, Mumbai and Delhi NCR, given the property rates in these cities. Graphic: Mint
Builders expect affordable housing projects to be the most desirable among buyers in Bengaluru, Mumbai and Delhi NCR, given the property rates in these cities. Graphic: Mint

As real estate churns, it’s the customers now calling the shots

Real estate developers are customizing products and are paying attention to what buyers really want from their residential properties

Bengaluru/Mumbai: Compact homes in the city or villas in suburbs? Credible developer or deep discounts? Ready-to-move homes or an under-construction projects? What is the elusive homebuyer looking for?

As the residential market undergoes a churn, it is the customer who is calling the shots, forcing developers to customise products and pay attention to what buyers really want.

Manasi Lahoti, 31, and her husband Manish, 35, both employed in the financial services sector in Mumbai, are house-hunting with a 60-65 lakh budget, for a home within city limits.

“We don’t mind compromising on the size and settling for a one-bed home but it can’t be too far, and be easily commutable. Today, price is negotiable but there are not many options," Manish said.

In Mumbai, India’s most expensive property market, developers are shrinking home size and making them more affordable, with not many takers for luxury units.

An October survey of 300 builders by QuikrHomes said 50% of developers are launching affordable projects for under 50 lakh per home, with Mumbai, Chennai and Kolkata leading the trend.

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Builders also think that the blend of social media and customer experience can work wonders for sales. Virtual tours, presentations and customer experience play an important role.

“...Fulfilling customer experience matters now more than ever as the decision to take that final leap into buying a house depends on it," it said.

Navin Makhija, managing director of property developer Wadhwa Group, said apartment sizes have significantly shrunk to make them affordable for the larger population. “There has also been a demand for homes sub-₹1crore. Large, credible developers never tried entering that space in a big way but with government’s Housing for All initiatives, they are seeing the mid-income and affordable housing segments as lucrative," Makhija said.

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This year, Wadhwa launched its township project Wisecity, Panvel on Mumbai’s outskirts with one-bedroom apartments (289 sq. ft to 400 sq. ft) priced at 25 lakh upwards. Nearly 1,500 units have been sold in the last six months.

Om Ahuja, chief operating officer—residential business at K Raheja Corp, said it is planning to launch a mid-income project in Airoli, with 3,000 units because of its huge potential.

Affordable homes, because of high land prices in Mumbai, are still being taken up only in the far-flung outskirts of the city, said analysts. Mumbai’s Marathon Group managing director Mayur Shah said the company is trying to bring in buyers into the city from the outskirts. Its newest project NeoSkies, in suburban Bhandup, is selling 199 sq. ft studio apartments for 43 lakh along with other kinds of units.

Anuj Puri, chairman, Anarock Property Consultants, said buyers in Mumbai prefer compact homes and want an all-inclusive price, with no added costs.

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“Developers have realized that the luxury story will not work. Prices have corrected and more buyers are coming out because prices are getting more affordable," Puri said. There is demand for smaller homes in the National Capital Region (NCR), but places like Gurugram have density norms so they can’t make smaller apartments. “NCR buyers research on the developer’s credibility and delivery track record. Besides the location, buyers want a sweet deal or an outright discount," said Getamber Anand, chairman and managing director of Noida-based ATS Infrastructure Ltd.

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Price is usually the main determining factor for young buyers, and affordability and compact homes are a common pattern in newly launched projects.

M. Murali, CEO and managing director of Shriram Properties Pvt. Ltd, said the brand of the developer is important to sell in Bengaluru and Chennai. Price and location, preferable closer to workplaces, come next. Homes priced at 40-50 lakh in Chennai and 40-70 lakh in Bengaluru are preferred by buyers.

“Even if you have a good price, but the developer is unknown, it’s difficult to sell. Buyers are more informed today," said Murali. To tap into a broader buyer base, Shriram is launching 700-850 sq. ft homes for around 20-30 lakh.

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“...Everyone is trying to work around products to fit in one-bedroom and studio apartments. Smaller size apartments that cost below 1 crore were hardly there in the past. This is what the market wants today and developers will only make what the market requires," said Gaurav Gupta, director, Omkar Realtors and Developers. It has launched three projects in Mumbai with flats (1 BHK) priced at 76 lakh up to 1 crore. Apartment sizes are between 333 sq. ft to 387 sq. ft.

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