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Yet to learn our lessons

Rakesh | Aug 3, 2009 |

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The Real Estate Market in India went through one of its roughest patches during the last 18 months. A problem of its own creation driven by extreme optimism and greed. One would have thought that the hens have come to roost and good sense will prevail for some time to come after having learnt some lessons. However it seems that some lessons are seldom learnt and speculators in both the stock market and real estate market seem to be sharpening their saws for action. This time the playing field is Budget Homes or so called Budget Homes whereby the decrease in area dictates the budget and not the cost per sq.ft. of salable area. In a nutshell, the essence of low cost in the true sense is lost.

The emphasis should be on low cost to the customer with no compromise in basic quality and not nano or mini homes. Using new low cost construction technology, innovative building materials, improving efficiency in construction resulting in reduction of waste and increase in construction speed will help reduce construction costs which can be passed on to the buyer after retaining reasonable margins for the developer.

The Industry Associations should come together and self regulate this market to address the genuine needs of the customers. This should happen before the Government steps in with a regulator to dictate terms for this fast growing segment which will define the future for the Housing Industry in India. The huge demand supply gap in the budget home segment is very inviting for Developers however reduction in size of homes will again result in a drop in demand in the near future. There should be strict standards in place as far as minimum size of homes is concerned across various formats available. This will ensure a better standard of living for the population and a dream come true in the true sense.