The reasonable luxury segment is not a new phenomenon in the market and its demand is increasing exponentially. On one hand, home-buyers are tremendously happy with the unique concept of reasonable luxury housing as they can attain their objectives of living in a luxury home without paying through their nose. And on the other, the developers get a casual to cater to the broader section of society making it a win-win situation for both parties.
Financially amicable homes bundled with excessive amenities are fast popular as ‘Affordable Luxury Homes in the real estate sector. Luxury homes are provided to the upper-middle-class segment as they demand a premium price to present the taste of ultra-modern facilities and use of superlative finishing materials in the wealthy locality which makes it unaffordable for mid-income buyers. The highest demand in the real estate sector is observed by mid-income buyers who seek a luxury lifestyle at a sensible price. Rapidly cumulative demand from this segment cannot be unnoticed, hence developers are making an exertion to reach out to a wider segment by constructing homes with luxury features at reasonable rates. The outlook of enjoying high-end facilities without stretching the budget is the key desirability for such projects.
The developers have to negotiate high margins to get into this segment. However, it helps them to sustain in the tough market as it is a fast-moving product growing the client base and agitating cash flow thus, managing the negative impact of market risk due to dynamic policy changes in a developing country like India. On the other hand, buyers in this segment also have to concession on certain characteristics to own pocket-friendly homes with the experience of luxury living. Hence, these projects are not essentially built in the posh neighbourhood that proposes extra spacious apartments with branded furniture and fixtures. Developers in this segment confirm to incorporate of luxury facilities in a suitable location with minimal wastage of area. Buyers in this segment are mostly young couples, nuclear families or small business owners who prefer EMI over rent.
The developers have come up with numerous concepts like smart & compact homes, eco-friendly planning resulting in lower maintenance and energy costs etc. To build luxury homes at a lesser cost. As they cannot concession on the décor and basic amenities, developers manage the rate by sourcing fixtures & building materials of good quality at reasonable prices, dependent on the choice of facilities.
However, developing reasonable apartments on a large scale is a challenge in urban India due to various reasons like the propagation of slums, unavailability of the land parcel, delay in consents etc. The state has special accountability to create an enabling environment for affordable housing developers, not necessarily through subsidies but by fast-tracking approval processes, and hopeful public-private partnerships. Also, reassessing the floor space index (FSI) limits can also be a great support.
The urban poor is catered to by the government's goal of "Housing for everyone by 2022" through the PMAY programme. On the other hand, the developers in the luxury segment's specialty category meet the high-end needs of HNIs and the upper middle class. Serving this middle-class market, which is the main driver of demand for real estate, is therefore crucial. Affordable housing developers have benefited from the idea's increased popularity in recent years. Additionally, buyers get to enjoy upscale amenities at a reduced price, thus the idea of affordable housing is advantageous in some manner for both parties.
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