News Point: The mid-market houses are increasingly becoming popular among the buyers with the share of this segment in the total residential sales going up every six months in the last few years.
The share of mid-market houses costing INR 20-50 lakh in the overall residential sales in the country has been progressively rising, touching an all-time high of 42 percent of total transactions in the second half of the current financial year 2018-19, according to data released today by India’s largest marketplace for new homes Square Yards.
The mid-market housing category accounted for 29 percent of overall residential sales in the first half of fiscal 2016-17, going up to 32 percent in the second half of the same financial year.
It further went up to 36 percent in the April-September period of 2017-18, steadily rising to 38.4 percent in the rest of the same fiscal. The category is continuing is onward march and touched 42.7 percent mark of the overall residential sales in the first half of the current fiscal. Thus, this segment is growing at staggering rate of 21 % CAGR.
“There has been huge latent demand at the middle stratum of the society for housing in the country that is now being taken care of. The quantum of requirement for mid-market housing is now being matched by adequate supply. This segment is increasingly becoming important constituent in the portfolio of most developers across the country and will drive the real estate sales in future too,” said Tanuj Shori, Co-Founder and CEO, Square Yards.
Consequently, there have been a flurry of launches of mid-market housing projects which are being picked up by actual users. Developers are now so focused about it that they have launched dedicated brands only for mid-market segment. These include ‘Joyville’ brand by Shapoorji Pallonji Group, ‘HomeKraft’ by ATS and ‘Provident’ by Puravankara Limited.
While the parent companies will continue to build houses in other categories, the new brands created by them will help position them in mid-market houses category differently and help them leverage government benefits.
Buyers have also been incentivized through PMAY scheme in which subsidy between 2.30 lakh to 2.67 lakh has been provided to wider population with family income ranging till 18 lakh per annum. PMAY scheme has been designed in such a way that benefit can be extended to wider range of apartment size based on annual family income.
The segment got a shot in the arm in January this year when the Goods and Services Tax rate on mid-market houses was lowered from 12 percent to 8 percent. Developers have been able to pass on the benefit of lower taxes in the form of lower prices of the apartments which is making the deal sweeter for the end consumers.