(This article was published in the Business Line print edition dated September 28, 2008
Greater need for cheaper housing. —
Rising interest rates, flare-up in steel and cement prices and consequent rise in housing costs have forced the middle- and low-income groups to postpone plans to purchase or construct that dream home.
In such a scenario, realty players look like they are going back to the drawing board and reworking their sales strategy — to come up with low-cost housing options.
“We now have a situation where low-cost housing is engaging the attention of established players,” says Mr P.B. Sajan, Executive Director of Costford (Centre of Science and Technology for Rural Development), a Kerala-based voluntary agency specialising in the Laurie Baker model of cost-effective architecture.
Some are already eyeing the first mover’s advantage, says Mr Sajan, who is receiving enquiries from interested players within the State and from abroad too.
And not without reason. The Working Committee of the Eleventh Plan (2007-12) has concluded that the total shortage of dwelling units at the beginning of the Plan period in 2007 was 24.7 million.
It is estimated that more than 70 per cent of the shortage is accounted for by middle- and low-income group. At the lower end, volume replaces margins, and makes sense for developers to get into this space.
The Baker model is finding greater acceptance and its underpinnings of eco-friendliness and sustainable technology is getting the exposure it deserves, according to Mr Sajan. “The range of offerings available with the Baker model is being widened as we go, by packing more advantages in savings achieved — be it in terms of money, resources, material and even energy. What we now seek to provide is not just a dwelling unit but a wholesome package of sustainable livelihood to our clients,” he says.
Some of the elements making up the package are rainwater harvesting, rainwater recharging, biogas and other means of conserving energy, particularly relevant in the context of high fuel prices. Mr Sajan sees a preference for low-cost housing emerging in the last two years. “We used to do 70 to 80 units annually over the past many years, but the demand is much more now,” he says, without putting a number to it.
A big builder has already approached Costford to design units of 2,000 sq.ft in the Rs 15-20 lakh range, the fully-loaded version of which now sells in the region of Rs 40 lakh to Rs 60 lakh. According to Mr Sajan, more such enquiries have been coming in from local builders around Thiruvananthapuram and the larger Kerala.
Costford has since been made the accredited agency of the Department of Local-Self Government in Kerala, taking up development work for the economically weaker sections of the society. Medium-to large townships are on Costford’s agenda.