This is an emerging segment and a large number of buyers are in the market now.

Every market shift throws up challenges and creates opportunities. The present economic slowdown has posed several challenges for developers to come up with attractive offers to sell their apartments. On the other hand, it has given rise to extremely good opportunities for investors and homebuyers. Banks too have pitched in with loan offerings tagged with low interest rates. In other words, the era of affordable housing has arrived.

Changing market dynamics

In Bangalore, the real estate market rode the crest of a booming IT segment for almost a decade. Whitefield, Devanahalli, Yelahanka, Hebbal, Sarjapur Road, and Bannerghatta Road, that were once considered suburbs without good connectivity and basic amenities, were included as part of Greater Bangalore. Road development and other infrastructure projects such as the international airport, the Metro Rail, elevated road, and underpasses improved connectivity to these localities, sending realty prices upwards.

New segment of home buyers

From October 2008 onwards with the global economic downturn, the real estate sector began going through a correction and prices fell up to 30 percent. This brought in a fresh segment of homebuyers and investors into the market, waiting to make the most of what was on offer and within their EMI structure.

Those employed in government services, bank employees, teachers, double income couples who had pay cuts but steady employment, singles with good income, all became prospective homebuyers. Homebuyers who were not wooed by developers earlier are now ready to buy homes because they fall within their budget. Now that prices of property have come within their budget, they have the money ready for a purchase.

Win-win situation

Gauging the rising demand for smaller and affordable homes with premium facilities, established builders have announced projects on the outskirts of the city promising homes available for prices ranging between Rs 20 lakhs and Rs 40 lakhs. This works out well for both developers and homebuyers. For those buying their first home, they still get a good deal with banks offering home loans of 85 percent of the value.

A few real estate developers, who have large land banks in the peripheral areas, have earmarked projects in Bangalore North and South for affordable housing. This kind of affordable apartment options are being made available in the range of Rs 20 lakhs to Rs 40 lakhs depending on the floor area. Currently, three affordable housing projects, one in the north zone and two in the south - one near Mysore Road and the other on Sarjapur Road - are coming up on the city outskirts giving real estate development a boost.

Investment prospects

The fact that homes have become affordable now should come as a boon for those who had been planning to buy a home before the downturn. In the current market scenario buying a flat, both as an investment and a potential place to live in, should be the objective for a family having a collective take-home monthly income of Rs 60,000-75,000. They can look at investing in a flat in the range of Rs 25-33 lakhs where their combined EMI works up to around Rs 20,000-30,000.

People, especially first home buyers, are buying affordable homes now because you can get a decent 1,000 sqft, two-bedroom apartment easily for Rs 25 lakhs. Even two years down the line, this can fetch a 20 to 30 percent appreciation if they desire to sell it to buy a bigger apartment.