Low-cost housing projects fail to buoy occupancy

It was touted to be the next big abode for low-cost housing. Boisar, which is mainly an industrial district in Palghar district in Maharashtra, has seen a spate of low-cost housing project launches. Sales have been good in the projects, but possession levels, however, have been disappointing.

Tata Value Homes, a 100 per cent subsidiary of Tata Housing Development Company, is developing a township in Boisar across 62.94 acres, with over 2,500 apartments of one-room, kitchen; one-bedroom, hall, kitchen; two-bedroom, hall, kitchen; and three-bedroom, hall, kitchen configurations.

Mahindra Lifespaces had recently launched its second phase of low-cost housing project in Boisar. The project, which is spread across 14 acres, is expected to have 1,400 units. In the first phase, the company has planned building around 359 units.

According to Tata Housing Development Company, possession is very cyclical and it is likely to go by the end of summer holidays.

“We have started handing over possession some time back and approximately 20 per cent of the customers have already started staying at the complexes. Shifting residence is cyclical and in sync with holiday season in the schools as that would involve seeking admission for their kids in schools around the new residence.

With the last semester on its way and summer holidays expected to start from April, we expect an additional 20 per cent to occupy their homes once the current cycle is over,” a Tata Housing Development Company spokesperson told Deccan Herald.

According to a report by UBS, residential sales were down 6.8 per cent (quarter-on-quarter) in the third quarter of the current fiscal, while new launches across cities were also down 10 per cent (quarter-on-quarter) and have halved (year-on-year).

Inventory stayed at a near seven-year high and cost overruns on older/delayed projects have contributed to rising construction backlogs for most developers, the report adds.

Real estate experts, however, believe that full possession of the Boisar projects is unlikely. ”Many people are unlikely to occupy their flats at Boisar. This is because Boisar is quite far away from city limits,” a real estate expert said.

Moreover, many of the consumers have booked flats as an investment, the expert said.