AP Rajiv Swagruha Welcomes

Distinguished Delegates to – International Conference

of NHB - APUHF

30-31, JANUARY 2012Shalini Misra, IAS

Managing Director, APRSCL

PRACTITIONERS IN EMERGING AFFORDABLE HOUSING MARKETS

Practitioner -APRSCL

• SPV under companies act for moderate income ( Rs. 2.00 – Rs. 10.00 lakhs p.a)

• Four and half year old organization• Demand of 1.76 lakh housing (70% SBR &

DBR)

• Constructing 139.10 M Sft • Spread in two and three tier towns also

Practitioner -APRSCL

• 24 townships under construction• Three townships completed and

inhabited• 5000 acres land bank – Rs. 6000 Crores• Created Asset value Rs.4500 Crores

Rajiv Swagruha • Unique and innovative • Self financed and demand driven• Non – budgeted and no subsidy• No exemptions• Sale cost 25% < market value• Integrated gated self contained strategically

located townships• City specific layouts, house designs, and patterns• Different sizes of houses • Green building norms

Rajiv Swagruha • Full infrastructure package like roads, water

supply, underground utilities, landscaped gardens, STP, water harvesting, firefighting system etc.,• Lifts (passenger & cargo) - generator back up• Facilities like piped gas supply, solar water

heating systems, car parking (charged)• Recreational & Commercial spaces, hospitals,

club etc., (not charged)• Construction as per NBC and BIS

Premium lifestyle at affordable cost

Buyers Psychology

• Monetarily rewarding and emotionally gratifying• Home where morning starts with chirping of birds• Integrated township safe and secure• Comforts like thematic parks, playgrounds• Commercial spaces – market at door step• Hospital at max distance of 1 to 2 Kms• School / offices – convenient transport• Recreational facilities within• Other status symbols – club at arms length

Buyers Psychology

• In SFS buyer has to pay the cost in installments – synchronized to physical progress of construction • Moderate income group cannot pay rents and

EMI together• Moratorium period of home loan is not

coterminous with the construction time• Buyer wants to pay when the house is “ready

to occupy”

Questions in Mind

• What is an “affordable House” ?• Will it be adequate and appropriate to my requirement?• Where can we get a quality affordable house ?• Am I eligible to apply for this ?• How much will it cost ?• Where will I get loan ?• What will be the EMI ?• What will be the maintenance cost • What are the transport facilities and amenities ?

Affordable Housing

• Affordability is the ratio of cost to income• Cost of living in that house (core, peripheral)• Quality of life• Transport & communication availability• Facilities & amenities- convenience• Maintenance cost for decent living

Rajiv Swagruha -Philosophy• “Affordable housing is not about box sized budget homes in far flung places where there is no connectivity to work places and little surrounding infrastructure”• An affordable house does not mean a substandard house or any compromise on space, quality or facilities as required by the family• Affordable Housing has to cut across all income segments of the society and has to make economic sense – inclusive / complementary housing

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Rajiv Swagruha -Philosophy

• Demand of affordable quality homes is in the price range of Rs.15 – 30 lakhs. Rajiv Swagruha range Rs.6.30 – Rs.36 lakhs

• Swagruha - necessity for many, opportunity for few and growth engine for Government - Inclusive growth

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Is affordability and adequacy both possible

• Yes• Rajiv Swagruha before finalizing detailed requirements, observed number of families living in different sizes of houses and flats and planned “an adequate housing”, followed up with no of exercises and negotiations to make it affordable with highest quality. • It offers choice in location, cost, sizes and pattern as well

Hassle-free life

An adequate affordable housing –Swagruha

• Income level - variety of sizes and pattern of construction• Size of the household – Delinked with

income level & co applicant allowed • Composition of the household – joint family• Profession – IT / Employees• Age – senior citizen – Prashanthi enclave • Aspirations – upward movement• Stability- covering two & three tier cities

Rajiv Swagruha – How affordable

• High land prices – optimization of land use• Cost of construction – on schedule completion• Transaction cost – No cost within the township• Profit margins - volumes and spread• Limited competition – 25% less than the market• Slow supply – demand driven and self financed• Outdated technologies – fast and cost effective

technologies used (Shirke & Mivan)

Affordable Cost Range

Sl.No Category and area Cost range in Rs. lakhs

1 Exotic (1599 Sft) 35.00 - 40.00

2 Classic (1487 Sft) 22.50 - 36.00

3 Intrinsic (1150 Sft) 17.40 - 25.00

4 Basic (798 Sft) 10.80 - 18.00

5 Civic (545 Sft) 6.30 - 11.35

No Hidden costs and extras

Buyer

APRSCL Bank / FI’s

Tripartite win – win relation

Building Trust

Issues

• Home loan under priority sector (10 areas)• No sub target for housing• Bridge loan under commercial Real estate• 150% risk factor• Absence of clarity and consensus• No Indian urban planned development &

vision• Mind set change of policy makers • Tax holiday for limited period• Concentration to shift to all urban areas

Issues • Govt initiated are tilted • It gives rise to skewed unorganized urban

growth and development• Supply has to respond to requirement in

different segments otherwise we might have surplus in some while shortage in some others

• A clear understanding of the nature of housing problem is an essential pre-requisite for formulating appropriate policies which have to be directed towards meeting requirements of all sections of population – inclusive complementary growth

Is Rajiv Swagruha CRE ?

Subsidized

Needy & political

Poor

No monetary commitment – Free

Limitless

Affordable ?

Needy & Non political

ModerateHard earned money, deliberate saving, Home loans

First House Missing - Advocacy

Real estate

Business & investment

Rich

Surplus money

2nd House onwards

Categories of Housing initiative

Success formula

• Long term loans (Home and bridge ) at concessional rate of interest

• Recognizing affordable self financing housing under priority sector in its totality

• Addressing full segment of population in an integrated manner

Seeing is believing … visit us

THANK YOU