India's real estate segment is on a high as it rushes forward in its endeavor to provide homes to everyone in the coming years.
India's rank in the Global House Price Index has jumped 13* spots to reach the ninth position among 55 international markets, on the back of increasing prices in mainstream residential sector (An IBEF report)
While there is a significant growth in the industry, there is a visible change in the buying behavior of the new-age customers.
An old saying goes: "A Home is where love resides, memories are created".
The new-age consumers prefer sensibly investing in properties which give them comfort and not forcing repayment of loans throughout lives. The creation of such properties need planning and strategies with the right mix of execution.
At Sowparnika, our marketing and sales teams were interacting with thousands of potential home buyers, it was seen that currently new-age home buyers do not look at spending exorbitant amounts on housing.
While keeping in mind the aesthetics of a dream home, buyers are now looking to practical houses. Real estate companies must adopt research- driven models to further delve into the current requirements of the home buyers in each of the localities.
Innovative operational models and production cycle
Realizing this trend, real estate companies must now work towards showcasing innovation in their properties to suit the requirements of the home buyers and hence, price them sensibly. This has led to the adoption of newer techniques to optimize their operations that will benefit the buyer and help him with quality property.
In-house construction and designing
This availability of quality homes at competitive prices can be the result of an innovative operations model. Having an in-house operations model, including construction, designing, manufacturing, without getting it outsourced can help in reducing overall costs. Costs can also be further brought down due to mass production of these houses within the span of just two years.
The recruitment of in-house resources in terms of both manpower and resources can not only help with timely completion of projects, but also in the efficient and optimal utilization of these resources.
The entire process, right from purchasing of the land, to construction and designing, to the handing over of keys, they have to be done within the given timeframe, thus having an opportunity to use the available resources before the costs rose.
With the assurances given to the home buyers on the timelines, the fulfilment process begins right at the time of purchasing the land at for construction. This ensures the land value is incident on the homebuyers without affecting the final cost for the buyer.
Well-designed plans and the right execution can also reduce the timelines of the entire process and thus, save on cost.
Procurement of material in advance
Developers who promise to deliver high quality homes at competitive prices are usually not engaged in joint ventures, thus keeping the middleman out. For this, one needs to pay the vendor upfront, in advance, which reduces the cost by 20-30%, thus giving a further guarantee of timeliness.
Innovation in execution is key
The method adopted by Sowparnika is a 'No brainer'. However, the secret lies in execution. Through innovations in re-engineering, the project cycle, vertical integration, optimisation of overheads and most-importantly by keeping the margins low, smart pricing can be attained. In this way, all the benefits can be passed on to the buyers.
Patrick Devine-Wright, a professor in human geography at the University of Exeter, UK, explains the perception of homes as the expectations of people in our society where one is supposed to grow up, purchase a house, get a mortgage and hurdle through the several financial hoops.
Today, especially the millennials, are keen to stay away from any financial mess. In the modern world, factors of economy and choice are said to be consistently affecting the perception of a home. Thus, the concept of Positive Homes, with sensible pricing as the alluring factor, is expected to take root and flourish in the coming years in the real estate segment.
The author,Ramji Subramaniam, is the Managing Director at Sowparnika Projects and Infrastructure Pvt. Ltd. Sowparnika is a real estate developer from South India delivering sensible housing to the new-age buyer.