BHUBANESWAR: Realtors are banking on housing units below the Rs 25 lakh range to revive the sluggish market in the city.
Though real estate sector across the countrywide is experiencing a slowdown, developers here said they can stay afloat by switching to projects offering houses at an affordable price. "There are prospective buyers for units costing between Rs 15 lakh and Rs 25 lakh. However, no good option is available to them in the city as builders so far concentrated more on high-end properties eyeing better profit margin. Creating such houses seems to be the best idea now to remain in business," said Pradipta Kumar Biswasray, the president of the Real Estate Developers Association of Odisha (Reda).
Biswasray-promoted Jagannath Promotes and Builders is coming up with a 400-unit project near Tamando with per unit cost starting from Rs 21 lakh. At least five such projects by various developers are on the pipeline within the next two months. Projects in the same cost range, earlier, came up only on the extreme outskirts.
Buyers for high-end properties were mostly miners and software professionals. However, on the backdrop of mining scam and recession affecting the software sector, the number of these prime buyers have falled sharply. Current buyers - mostly salaried employees - are mostly those looking for a house rather than the investor buyers, he said.
According to builders' own estimates, around 10,000 housing units are in advanced stages of construction in the Rs 35 lakh-plus range in city are currently unsold. "The demand for high-end property has gone down because there are few buyers. New projects have to squeeze unit sizes to keep prices significantly lower," said D S Tripathy, the joint secretary of Confederation of Real Estate Developers Association of India.
Not everybody is convinced that the move will yield goos results. "The growth of capital market was misread and the demands here have far exceeded supply. I don't think houses below Rs 25 lakh would attract a large number of buyers," said Anup Kumar Mohapatra, a former president of Reda. While there is demand for around 1,500 to 2,000 houses annually in the city, around 6,000 new houses are being added every year in the past over five years, he added.