Real estate developer Puravankara Ltd said it has started taking ‘expressions of interest’ from buyers for its upcoming ‘affordable’ housing project at Judicial Layout, Kanakapura Road, Bangalore.
Provident Park Square is being taken to market through a quasi-book building method. Under this, price bands are announced for each type of property and interested buyers can place bids at the price of their choosing within the band.
The final price, to be announced in March, will be decided by checking for the highest price at which all or most of the units can be sold.
Even if someone places a bid that is higher than the final price, the person will have to pay only the final price, and not his bid price.
However, those that place bids first will be given the first choice of units, allowing them to pick the best locations. This will be based on first-cum-first-serve method, the developer pointed out. The first phase of Provident Park Square will be ready by 2021.
“This project is a one of a kind mixed development project which caters to the needs of a new age home buyer, like a micro mall. The property includes restaurants, retail stores and many more such lifestyle amenities,” it said.
Puravankara will use what it called “precast technology” to create the apartments.
“The Home buying process from time immemorial has depended on “brute-force negotiation” between buyers and the seller,” said Puravankara, arguably the most dominant residential housing brand in Bangalore.
“The quasi-book building method eliminates this wasteful exercise and introduces a transparent yet competitive manner of price discovery and selling of real estate, which becomes even more essential in the “Low-margin-High-Volume’ affordable housing space,” it said.
The project will seen an investment of Rs 600 crores, the company said.
The company said it has plans to develop 10 mln sq.ft of affordable housing projects through the next 13-15 months.
“After some interesting times in 2017, we are optimistic about 2018 being a great year for the industry,” said Ashish R. Puravankara, Managing Director, Puravankara.
Puravankara is not the first developer to choose the IPO method of selling its inventory.
The innovative method of selling the units leverages technology to overcome the uncertainty of the market.
At present, real estate prices are in a bit of a flux as the sector is no longer considered the sure-shot return-generator that it was till 2014.
Prices in real estate appear to have plateaued, and are barely keeping up with inflation. There are predictions that the real returns on investment in property could turn negative going forward.
In such a situation, people such as non-resident Indians and high-salaried professionals have stopped buying up expensive flats hoping for prices to go up in the future.
This has hurt the business models of real estate developers across the country, who have now started targeting the middle class with ‘affordable’ houses.
To give a boost to the sector, the central government has announced schemes under which it will give subsidies of around Rs 2.5 lakh for people who are buying homes in the ‘affordable category’.