The Indian real estate scenario is getting interesting day by day, especially that in the residential sector. Builders and developers who were earlier into the premium segment of housing have realised that one of the ways to beat the recession blues is to cater to the middle income group. This is one segment of the population that could not afford their dream house earlier because of very high prices.

DLF and Unitech, the two largest real estate developers of India have recently launched residential projects with relatively more affordable pricing. Since these affordable 2BHK apartments have shown high demand, more and more developers are including such units in their projects. 

Jaypee Greens recently launched reasonably priced housing projects - Jaypee Kosmos and Jaypee Aman. As per the Jaypee spokesperson, Jaypee Aman was sold within 24 hours. According to him 2BHK apartments are a hit with young professionals. The 2BHK end-user is attracted by the price tag, affordability factor and lower EMIs. His is likely to be a nuclear family with small kids where a third bedroom is not a necessity and hence not worth the additional cost. Home loan interest rates have also helped to bolster this segment as loans under Rs 20 lakhs get some Govt. incentive for the banks.

The head of sales and marketing at Jaypee Greens says that they have sold around 10,000 of these affordable housing units in past six months.

For Unitech and other real estate developers, building affordable homes is paying rich dividends. A survey of India’s top property firms and estimates from the industry body Confederation of Real Estate Developer’s Associations of India (Credai) show that over 70 million sq ft of residential space was sold in the first six months. Bulk of the sales happened in the last 90 days and majority of the homes sold were in the affordable segment.

The chairman of Hiranandani Group, Mumbai says that a couple of years back almost every developer was into the plush premium segment, unlike now when everyone is in affordable segment.

Many real estate firms which were teetering on the brink of collapse a few months ago have come back to life thanks to revival in demand. Softening of home loan interest rates and correction in capital values by some developers has resulted in the increased demand. An improvement in the overall sentiment regarding the economy coupled with increasing liquidity due to a recent upswing in the equity markets have also renewed consumer confidence in real estate.

Many more such affordable units are required in the market to really bridge the demand-supply gap.