Where Are India’s Budget Homes?

Anil Pharande

The concept of affordable housing in India sounds simple enough, but nothing could be more complex than this subject. We all know that India needs more budget homes, but where are they?

Trends come and go. Developers’ business agendas change along with the dynamics of the real estate market. However, the dire need for compassionately priced homes remains. Of course, there are quite a few developers who are addressing the demand for affordable housing. Nevertheless, if we consider the sheer vastness of the demand, their offerings don’t make even make a dent in it.

Pune PropertySoon after the real estate market revival after the Lehman-induced global financial crash, it did seem as though the Indian developers had finally woken up. A huge number of them focused squarely on developing affordable housing projects. The inflexible demand for such homes in our larger cities and their further suburbs meant was their ticket out of financial trouble.

And then the economy revived, and it kept on reviving. Suddenly, home buyers with lower incomes were no longer in fear of their jobs. The stock market revived, and capital began to flow into the real estate sector again. This was good news for the real estate market in general, but bad news for the affordable housing sector. Greed took over again, and the focus of developers once again shifted to higher-priced premium housing.

Premium homes were an attractive segment for developers in 2006-07, and there were many project launches aimed squarely at India’s more affluent classes. The global economic downturn put a brake on this trend only through the worst period of 2008 and 2009. In this period, it did seem as though affordable housing was going to get its due share of attention at last. However, they did not take long to concentrate on premium housing again.

So – where does the common man stand today? What has happened to affordable housing? Was it no more than a passing trend to tide developers over during the leaner economic period? Budget home launches have reduced a lot. In fact, even mid-income homes in many of our cities have become so expensive that demand for them has slowed down.

It cannot be said that nothing at all is happening in terms of budget homes in India. There are commendable efforts still being made by conscientious, smart developers to cater to the housing needs of the lower-income groups. However, it is not enough. The shortage in this segment is still huge. The Government has come out with special schemes for affordable housing for builders, but most of them are not taking up the opportunities.

We are now faced with an escalating problem. More and more people who can be classified as slum dwellers are obtaining good jobs, and are able to afford homes in the bracket of Rs. 7-12 lakh. It is only because there is no supply of homes in this bracket that they continue to live in slums and run-down chawls. The affordable rental housing projects that were announced earlier with so much fanfare are not happening in the required numbers.

This means that India now has vast numbers of people who could live in better conditions, but are unable to. Because of the continued demand for accommodation in slums, it is harder than ever to eradicate them. Slum redevelopment can only take place on a significant scale if the resistance to it decreases.

Anil-PharandeAnil Pharande is President of CREDAI PCMC and Chairman of Pharande  Spaces, a leading construction and development firm that develops township properties in the PCMC area of Pune, India.

This article may be reprinted with proper attribution to the author and a link back to PunePropertyBlog.com

PCMC gets defence land for widening Aundh Road

(Times of India, Sept. 10, 2011)

pune PropertyPUNE: The work of widening the Aundh-Ravet Road near Aundh commenced on Friday after a gap of nearly a year. The Pimpri Chinchwad Municipal Corporation has begun the work as it has received written permission from the defence authorities. The road-widening work had been stalled as the defence authorities had earlier objected to the work.

Municipal commissioner Ashish Sharma said the defence authorities on Thursday granted the permission to the PCMC. He said the PCMC had earlier paid Rs 18 crore to the defence authorities for the land.

The widening work will be from the Aundh Chest Hospital up to Y junction. The work will reduce traffic congestion on the narrow road near the hospital, he added. The widening work on the 14.4-km Aundh-Ravet Road is being done for developing a BRT corridor. For early completion of the work, the road has been divided into seven sections for which contracts have been given. The work on widening the four-km stretch from Rajiv Gandhi bridge in Aundh to Sai chowk in New Sangvi could not be completed due to the delay in getting the defence land.

The narrow stretch of the road is a bottleneck and witnesses daily traffic snarls during the peak morning and evening hours and causes inconvenience to hundreds of motorists.

Dilip Kudale, coordinator, engineering department, PCMC, said, the road is being widened from 15 to 45 metres. The PCMC will complete the work in the next six months.

http://timesofindia.indiatimes.com/city/pune/PCMC-gets-defence-land-for-widening-Aundh-Road/articleshow/9930496.cms

The Real Estate Evolution Of Nagar Road

Nagar Road is a lot more than just a stretch of highway. In fact, it has become symbolic of industrial and commercial progress in Pune. Some of the most economically thriving areas in the city are situated along Nagar Road. Kalyani Nagar, Vadgaon Sheri, Chandan Nagar, Viman Nagar and Kharadi are the ones that come immediately to mind.

Pune PropertyThe development taking place in these has given Nagar Road an entirely different image, and the name is gaining national and even international prominence. Let us examine Nagar Road’s real estate hot-spots according to the intensity of development as well as physical and social infrastructure.

KALYANI NAGAR

Kalyani Nagar is named after Dr. Neelkanth  Kalyani – owner of various notable companies like Bharat Forge and Optronica. It has emerged one of the most prominent and established commercial real estate destinations on the Eastern Corridor of Pune. Its strategic location between Koregaon Park and Viman Nagar and its close proximity to the airport, railway station and other commercial areas like Kharadi and Hadapsar makes it an ideal destination for IT/ITES companies.

Kharadi has also emerged as one of the most upmarket residential destinations in Pune. It is home to many luxury hotels and boasts of a golf course as well as prestigious social establishments such as the Connoisseur’s Club, Ganga Retreat and the Royal Connaught Club.

The IT and ITES-BPO segment have completely reinvented Kharadi’s landscape. High grade residential options have sprung up all over. Amongst all the above-mentioned localities, Kalyani Nagar’s rate of development is by far the fastest. The Pune-Mumbai Expressway has been a major contributing factor.

The Government responded to this potential by constructing the Kalyani Nagar-Koregaon Park connecting bridge, thereby linking these two progressive and vibrant localities. The ease of transport and commuting has resulted in even higher industrial and retail activity and boosted the residential sector, as well.

VIMAN NAGAR

Named for its proximity to the Lohegaon Airport, Viman Nagar is located approximately 10 km from Pune City. It is still relatively affordable and offers excellent connectivity by virtue of regular bus routes and a much-improved road network. Since it is the first major locality one reaches from the vibrant Dhole-Patil Road, it is far from isolated in spite of the distance from the central city. It can be easily reached from the airport as well as the railway station, and this is one of its most powerful selling points. Also, with the Air Force and Army camps hemming it in from three different sides, Viman Nagar is one of the safest residential and commercial localities in Pune.

Viman Nagar owes importance on the real estate market to its proximity to Kalyani Nagar. However, it does boast of a better residential infrastructure, and is still the preferred area of residence for immigrant software professionals.

KHARADI

Situated along the Kharadi- Hadapsar Bypass, Kharadi has the unique distinction of being accessible from three focal points of commercial importance, namely Nagar Road, Sholapur Road and Mundhwa/Koregaon Park. In addition, it is bookended by the industrial zones of Sanaswadi, Ranjangaon, Hadapsar and Parner. Since it also houses a telephone exchange building, it definitely had all the makings of significant commercial and industrial presence.

Today, Kharadi has been earmarked for a lot of IT development because of its excellent road network, the MIDC-promoted Info Tech Park as well as EON SEZ and other IT Parks in the neighbouring Kalyani Nagar. Though it is now a prominent IT/ITES destination, it has yet to evolve as a significant force on the residential property market.

WAGHOLI

Wagholi has emerged as a preferred residential destination primarily due to the competitive price that the area offers compared to other residential catchments along Nagar Road, such as Kharadi, Viman Nagar and Kalyani Nagar. Apart from being affordable, Wagholi is the most convenient location for people working in the Ranjangaon and Sanaswadi industrial areas as well as in the Kharadi-Magarpatta belt. Today, Wagholi is well-connected by the completed six-lane Nagar Road – making commuting to and from this area, which was once considered an obscure outlying location, very convenient.

MUNDHWA

Another distinct beneficiary of the Kalyani Nagar-Koregaon Park bridge, Mundhwa began as an Armed Forces area and has enjoyed a disciplined approach to overall development for this reason. It is located squarely on the Nagar-Sholapur Highway. Since it is immediately adjacent to Koregaon Park, it has earned itself the rather enviable label of Koregaon Park Extension. Considering KP’s rate of development and general upper-crust aura, this is extremely significant. The area is poised for rapid development because of its close proximity to extremely successful Magarpatta township that transformed the real estate landscape of the Eastern Corridor of Pune.

VADGAON SHERI

Vadgaon Sheri has still not completely risen from obscurity, but nevertheless has the same potential as all other localities along Nagar Road. At the present time, Vadgaon Sheri awaits coming into its own as the neighbouring Kalyani Nagar and Viman Nagar eventually share their glamour and development fallout. One of the most attractive features of this area today is its cheap land rates.

RANJANGAON

This is another area of intense industrial activity along Nagar Road. It is mainly known as an MIDC entity, but is now seeing the entry of residential projects that cater to the workforce of this industrial catchment. It has also been earmarked as the venue for the new International Airport.

Despite the great potential it offers, Nagar Road itself is surprisingly under-developed as a road conduit for all the real estate goldmines along it. Connectivity remains a significant issue, and it is hard to understand why the authorities have not taken greater interest in it. Lack of planning has always been the bane of real estate development in Pune, and Nagar Road is a good – if sad – example of this fact.

Anil Pharande is President of CREDAI PCMC and Chairman of Pharande  Spaces, a leading construction and development firm that develops township properties in the PCMC area of Pune, India.

This article may be reprinted with proper attribution to the author and a link back to PunePropertyBlog.com

Pune Property – The Advent Of Transparent Real Estate Deals

Pune PropertyAnna Hazare and his fight against corruption were all over the news for the better part of the month. There was a lot of food for thought for everyone, including property market stakeholders. While there was no direct reference to the immense amounts of black money in real estate, Anna Hazare obviously addressed this aspect in his crusade, as well.

In this context, it is pertinent to note a recent testimonial by a senior representative of a leading international property consultancy here in Pune.  His statement was in response to a request for his views on the subject of corruption and black money in the Indian real estate sector.

He pointed out that the subject of corruption in real estate is bound to crop up again and again, especially in light of the scams that rocked the news bulletins just a few months ago. However, he also correctly pointed out that stricter scrutiny for and measures against the movement of black money in the sector are already being enforced. Nevertheless, he stated, we are still in the early days of our battle against corruption in various business segments, and that it will take time to completely subdue its effects.

Anna Hazare himself would not dispute this fact. The rot of corruption has set in over a number of years, and has therefore sunk rather deeply into it at various levels. To weed it out completely will take time, but the sanitation process can be accelerated with greater consumer awareness. After all, corruption in real estate is fed both at the supplier and consumer ends. Thankfully, this syndrome is already on the decline because of increasing awareness among Indian property buyers.

The traditional viewpoint of black money driving Indian real estate is obsolete in many ways by now. In Pune, property buyers should be aware of the fact that many of today’s larger, reputed developers are already offering completely transparent deals. The prevalence of such developers is, in fact, higher in Pune than in neighbouring Mumbai. Pune property buyers have the option of patronizing such developers.

The times when Pune property buyers were completely at the mercy of corrupt small-time developers are long over. Those looking for homes in Pune are no longer limited in their options. The more prominent developers in Pune have long since recognized the need for greater transparency in the system. After all, the largest component of Pune residential property buyers is made up by the salaried class, who do not have large cash reserves and often need 100% funding on home loans.

However, there are also larger reasons why Pune real estate is becoming more transparent. The Pune property market is a focal point for foreign investors who are attracted by the immense potential it presents. Residential developments around the Hinjewadi and Kharadi IT hubs as well as the integrated townships of Primpri-Chinchwad are drawing massive investments from from domestic and international investors. With the exposure to global funds, the sector has matured rapidly and transparency is becoming a norm.

In addressing the issue of corruption in Indian real estate, it is important to note that there will always be supply where there is demand. A corrupt system holds illegal advantages for both the buyer and the seller. If more and more sellers are willing to offer clean deals, it is to be hoped that more and more buyers will opt for such deals. only then will we be truly on the way to a corruption-free real estate market.

pharande spaces logoPharande  Spaces is a leading construction and development firm that develops township properties in the PCMC area of Pune, India.

This article may be reprinted with proper attribution to the author and a link back to PunePropertyBlog.com

Posted by: K. D. Nagarkar