Mumbai: It's an unusual promise from a builder: dwellings for as low as 6.25 lakhs in Mumbai's far outskirts. Also thrown in are a helicopter joy ride and a job for one female member of the buyer's family.
Karrm Infrastructure, a builder of budget homes, has been promoting these offers in newspapers and on local radio for its project in Shahapur, about 56 miles northwest of Mumbai. The commercials seek 90 monthly payments of Rs 7,000 rupees each with no hidden costs and say the project conforms to "Vastu," a local version of Chinese feng shui.
The closely held company is among developers seeking to tap the affordable market that Cushman & Wakefield Inc. estimates is worth $11.8 billion.
Demand for low-cost units is rising as Prime Minister Narendra Modi advances his "Housing for All by 2022" program, while builders of high-end apartments in cities like Mumbai find fewer buyers and struggle with an inventory pile-up.
"Urban affordable housing has long been neglected in India due to various reasons such as high land prices, delays in getting approvals and low margins in the segment," Sanjay Dutt, executive managing director, South Asia at Cushman & Wakefield said. "Now, with renewed focus from the government, we expect this segment to gather momentum."
Karrm says its low-budget project offers a swimming pool, a hospital, school and a super market. The biggest unit offered is about 202 square feet -- all of one room, a kitchenette and a toilet.
A full payment upfront fetches a 20 percent discount.
A sales representative in Karrm's site office says the units will be ready in three years and the job offer for the female member of the buyer's family is at a food processing factory coming up in the area.
For Shyamsundar Kamat, a chauffeur in central Mumbai, the above offers aren't enough because of the long commute to work and back, which could shave five hours off his day if he were to buy one of Karrm's units.
"This doesn't make sense for me," he said. "I can use that time to do some extra work and earn more. This is just too far." That is the reality of land-starved Mumbai, where the premium paid for a home near the work place is too high.
Ketan Patel, the project head of Karrm, wasn't available in his Thane office and didn't respond to requests seeking comments.
Building homes for the poor might make sense to help boost volumes in a market where Indian real-estate companies are struggling with dwindling sales.
Home sales in India's top eight property markets fell 4 percent in the quarter through June from a year earlier, while unsold inventory rose by 18 percent, according to research firm Liases Foras, which estimates it will take at least 45 months to find buyers for unsold homes in Mumbai alone.
India's urban population may reach 600 million by 2031, up from 377 million in 2011, according to the government. With a shortage of 18.78 million units in the urban housing segment, the government is focusing more on reducing squalor in cities and towns. It has shortlisted 305 cities and towns across nine states to start building houses for the poor.
Lower mortgage rates for the poor, cheaper land and streamlining the approval process are some measures the government must look into to help give PM Modi's initiative a boost, said Rohit Poddar, managing director at Poddar Developers, that builds affordable homes on the fringes of Mumbai.
Developers also need to provide infrastructure and amenities to lure customers, he said.