Builders are trying hard to acquire cheap land and technology for low cost housing after the government and central bank announced incentives for affordable housing, including cheaper land to buyers and developers.
Real estate companies like Tata housing, ATS infrastructure and many more are busy in the Rs 5-20 lakh home segment projects. There is a large market for such homes but a big supply constraint as well, said by shailesh pathak, the executive director of the Bhartiya group, who is planning to build 10,000 low cost homes over the next two to three years.
As said by the ministry of housing, India faces a shortage of 18.78 million homes, out of which 96% is the economically weaker and low income segments. The biggest challenge for builders is to find cheaper land that makes it easy for them to build these homes. But such lands are generally available away from the cities which have lack of transport facilities. What is required in this segment is to keep cost of construction in check, which can be achieved by adopting technology. What conventional construction achieves in three to four years, this technology does in two to three years and the time saved translates into cost benefits.
Noida based ATS Infrastructure has built 400 apartments priced less than Rs 10 lakh in Uttar Pradesh and is looking at similar projects on the outskirts of the city.
ATS Infrastructure would look at Incurring capital expenditure for technology only after a certain scale is reached. At the moment, this in house construction team sources materials from around project sites to keep costs low. Builders are working on different models. The famous Anantraj industries, secured cheap land from the Rajasthan government in Neemrana, but on condition that the company would not sell houses over a certain price. It built 2,300 homes with one room, toilet and kitchen in the industrial area and sold them at Rs 8-9 lakh each.
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Mayank Saksena, managing director at property advisory from JLL, said several developers are looking at buying cheap land and some are even open to revenue share for projects with owners of land in good locations. While the government has articulated a clear vision for housing in the budget this month, apart from cheaper capital and land, approval delays and regulatory needs to be sorted out.
Therefore it is very important for the builders and developers to invest in their projects carefully keeping in mind the construction cost. The machines used by them should be latest and highly effective then only it will be a cost effective project. As the use of this latest technology will help in saving your time as well as money and they will be able to earn more than spend which will be of some help.
