Affordable housing developers in India target NRIs
Mumbai // Affordable housing developers in India are increasingly targeting non-resident Indians from the Arabian Gulf amid demand for budget homes.
Value Budget Housing Corporation (VBHC), a developer based in Bangalore, opened its first international office in Dubai in October and now wants to build cheap homes in India for expats in the UAE as well as the wider Middle East region.
“We get about 8 per cent of customers from the UAE,” said PS Jayakumar, the managing director and co-founder of VBHC, which is building affordable housing in locations including Chennai and Bangalore. “But this can easily go up to 25 per cent to 30 per cent – there’s a lot of headroom here.
“We want to now reverse engineer the process by looking at residents in Dubai and trying to work out what locations would suit them more and then try to build developments in those areas, so that our projects have a high degree of relevance to our customers.”
For example, because of the large number of Indians from the state of Kerala working in the UAE, it is looking at opportunities to develop affordable homes there, he said.
The prices of its homes start from 1 million rupees (Dh58,985). Its customers in the UAE are typically first-time homebuyers and clients who are buying properties for relatives in India, Mr Jayakumar said.
HDIL, a developer in Mumbai, is building affordable homes in the suburban areas around the city and says that it is targeting non-resident Indian first-time buyers and investors, as well resident Indians.
There is a dearth of housing stock in India – particularly affordable homes.
“Rapid industrial and commercial development results into development of new cities and expansion of the existing ones,” said Hariprakash Pandey, the senior vice president of finance and investor relations at HDIL. “With this expansion of the cities, development of affordable housing is often neglected.
“Metros such as Mumbai, Delhi and Bangalore [have an influx of people] every year in search of opportunities. However, due to lack of affordable housing facilities, these [people] end up staying in slums or dilapidated buildings.
“There is also a problem of rocketing prices, resulting in poor housing stock and congestion.”
About a year and a half ago, Emaar MGF, a joint venture between Dubai’s Emaar and the Indian developer MGF, talked about plans to enter the affordable housing market, but to date its projects have remained in the luxury residential segment.
“India as an affordable housing destination is always attractive,” said Subhankar Mitra, the local director of strategic consulting at JLL India.
The Indian government on Tuesday approved changes to the property regulatory bill, which are set to benefit homebuyers through greater transparency and accountability of developers and brokers. This is expected to reduce delays and fraud.
“Over the last few years, the whole industry had been passing through a credibility crisis with fresh deals almost drying up,” said Shishir Baijal, the chairman and managing director of Knight Frank India.
“The bill will only help drive in greater accountability, and bring back customers who have so far been sitting on the fence.”