DELHI: Apartments priced under Rs 5,000 per sq ft account for nearly three out of four homes sold in Mumbai, National Capital Region, Pune, Bangalore and Chennai over the past year, data from real estate research firm Liases Foras shows. While such homes comprised 73% of the total sales in these areas, the figure was an even higher 84% in Bangalore and Pune.
About 78% of the sales in Chennai and 80% in the National Capital Region were in this category while the Mumbai Metropolitan Region saw the lowest proportion of apartments sold in this segment, at 42%.
"People in this segment realise that prices will only go up and this level of affordability will be hard to get in the future," said Lalit Kumar Jain, chairman of builders' association Confederation of Real Estate Developers Association of India.
Property prices saw a spurt between 2010 and 2012, but in the past one year prices have stagnated in most places and even dropped in a few areas.
According to National Housing Bank (NHB) Residex, the quarter to September saw prices drop in 10 cities while 12 cities saw a marginal rise. NCR saw a drop of about 4.5% while prices fell 1% in Bangalore.
At the end of September, 711 million sq ft of homes remained unsold across the country, an increase of 41 million sq ft in just one quarter, according to Liases Foras.
People in this segment are still buying because prices have come down in recent quarters and developers are offering discounts and schemes, said Shiv Priya, executive director of Amrapali DevelopersBSE 0.00 %. "Now there is a perception that after elections prices will start increasing again," Priya said.
The loan requirement in this segment is relatively lower, so servicing it is also much more affordable, said NHB chairman RV Verma. "Prices have also corrected or stabilised, so people feel it is the right time to buy a house," he said.
For Indiabulls Housing Finance, this category accounts for 80% of home loans. "A majority of people in this segment work in middle management of companies. From a job continuity perspective, they are safe.
There is no fear of job losses in the economy at the moment," said Gagan Banga, managing director and chief executive officer of Indiabulls Housing Finance.