PANJIM: Bread, clothes and a house are the three non negotiable of life. While bread and clothes can be accessed without much difficulty, the desire to own an affordable house in the state is much harder to satisfy.
The realty business in the state has been experiencing a slump for a couple of years. This is in line with the trend that has been common across the country. In Goa, the ban on mining lead to a marked depression across various sectors of the state economy. The realty business in the state was marked by a rapid increase in the price of land in places like Panjim and its surrounding areas. This lead to housing projects in the capital city becoming very expensive and going beyond the purchasing power of a middle class family.
In Panjim the cost per sq mtr went over Rs 50,000. To make matters worse none of the builders were prepared to reduce the price of their flats when demand flat-lined. Flats remained unsold and a large number of people in the state were left frustrated by the fact that they were not able to buy flats due to the high cost. Recently however there has been a change with certain builders looking at the mid-level consumer as a prospective market. Affordable housing in Goa is perceived as anything costing less than Rs 50 lakh.
A new 400 flat project announced by the Mangalam Group has 2 bedroom flats priced well under Rs 50 lakh. Vinod Goyal, Director of the company said the market for affordable housing was huge all over the country and more so in Goa. He said “There are approximately 20,000 to 30,000 people in the market for affordable housing in Goa. In this state anything under Rs 20 and Rs 30 lakh can be easily considered as affordable housing.” In this project which is coming up at Kadamba plateau a 1 bhk flat can be picked up at Rs 30 lakh and at the other extreme a 3 bhk for Rs 60 lakh”.
He went on to explain that the rise of the nuclear family in the state would continue for years to come. He felt this would be lead to a demand for affordable housing. He added that this segment would grow by 5 to 10 percent for several years. He also said that the demand for affordable housing was driven by the demand for a second home.
Given that the state economy was driven largely by tourism after the ban on mining, people from all over the country wanted to buy a house in the state.
The group had conducted an exhaustive survey in the state prior to starting work on the project. An analysis revealed that the largest segment in the state was the middle class a segment that was looking for a flat priced well under Rs 50 lakh.
KulaSekhar of Milroc another builder in the Goan market said the middle class segment was without a doubt the most important segment and which had not been targeted so far. He said his next project in Pilar would be aimed at those interested in buying affordable housing. The project he said which would start after the monsoons would have 2 bedroom flats selling for well under Rs 40 lakh.
The ever increasing cost of land was a challenge and Goa was also hit by the fact that most of the land in the state was owned by private parties. This meant builders had to deal with private parties who wanted to make the most of the transaction at hand.
He said the state governments in other states had land and would usually have an auction for affordable housing. Another builder who did not want to be named said that builders in Goa were interested in making a fat profit on each and every project instead of making steady profits over a number of projects as was the norm in other states.
Desh Prabhudessai, President Credai Goa said land in Goa was very expensive and the cost varied dramatically in different parts of the state. This made it very difficult to focus on this segment. There was he said lot of land available in the interiors but not many people wanted to move over and stay in those places adding to the challenge. Then there was also the matter of the recent budget which was not very friendly to the industry making it even more difficult to operate in the state.
Affordable housing he said was important and it was like stating the obvious but the economics in the state dictated that it was difficult to focus on this segment. Perhaps another builder who did not want to come on record for this article who stated that it was important that roads be built connecting the various corners of the state thus making the so called interiors accessible.
It would, he added be also helpful if builders decided to take home smaller profits instead of holding out for the large profits which many felt was their right. It was he said not possible in this day and age. Perhaps time will tell if the depression in the reality market helped change the manner in which the business was conducted.
