Demand for sensibly priced homes has helped bring in concept of mass production
As per the Indian Brand Equity Foundation, India's real estate market is expected to reach US$ 180 billion by 2020 from US$ 126 billion in 2015. Emergence of nuclear families, rapid urbanisation and rising household income are likely to remain the key drivers for growth in all spheres of real estate, including residential, commercial and retail. Housing sector is expected to contribute around 11 per cent to India’s GDP by 2020.
With growth in industry, cooperation required from realtors has tremendously increased. However, realtors these days are concerned with the construction process as it involves cosmic expenditure and huge expectations from prospective buyers. The steps being taken to optimize the construction are based on market insight and needs of the customer. Several reforms in realty sector have brought uniformity in pricing of units, thus impacting the prospective home buyers. Realtors have chosen the path of mass production so as to refrain from wasting raw materials and improving the outcome by stragised operations.
Automatically, with saving raw materials, realtors can save a lot of money on various projects and be able to offer houses at comparatively lower prices. The demand for sensibly priced homes has catalysed the process of mass production.
Demand for sensibly priced homes has increased
With the number of immigrants moving to cities, the demand for sensibly priced homes has increased. These immigrants are mainly first-time homebuyers who have shifted to cities for reasons such as work. The young workforce comprises of new age buyers who prefer sensibly priced homes over luxurious amenities, mainly because of their tight budget. Instead of renting a home, such buyers can actually fulfil their dreams in owning a home.
Not heavy on pockets
By investing in a sensibly priced home, owners can manage their other expenses in the best possible way. For instance, owners take up home loans, in case they are buying luxurious spaces. This means a considerable amount of money from one’s income needs to be put up for the loan. As a result, it tightens one’s pocket and acts as a burden over a longer period of time. For the new age buyers, this becomes impossible for them and they end up renting houses where rates are no less. Therefore, such sensibly priced homes are ideal for new age buyers, neither compromising on the quality nor getting engaged into any financial restraints.
Has given rise to mass production benefitting realtors
While home buyers are willing to move forward to grab their ‘first home, ’the realtors are too getting a lot of benefits out of mass production.
Mass production of housing units are usually automated which helps builders to reach to accuracy in the best possible way. Automation in the production system will benefit both the builders as well as the end users in a number of ways.
A number of real estate builders are incorporating in-house teams of construction, designing, distribution and so on. Having such a 360-degree in-house approach benefits the builders to save up on production and labour cost as they do not have to outsource it to other agencies.
Mass production also enables builders to save up raw materials to great extent. The process allows technology to ensure that raw materials are used up as per the exact requirement which further helps in reducing the entire production cost.
Producing in mass will definitely increase the rate of production without an increase in resource cost. Because of the increase in production rate, builders are able to deliver projects within promised deadlines. Timely delivery further enables the builders to gain trust from the customers and help in maintaining good reputation in the real estate market. In the long run, this will help in increased sales and profits.
For producing units at mass, realtors need to lookout for availability of free land along with neighbouring facilities. A location which has potential to become hub of a particular city in the upcoming years might often interest developers. Also, areas nearby the office crowd could serve the best for realtors in order to attract the professionals for sensibly priced residential spaces. But all these factors depend heavily on the availability of huge land area for enabling the developers to take up mass production.
The growing demand for sensibly priced homes, further prompts real estate developers to realise the importance of incorporating innovative operational model to produce units in mass. With real estate players now incorporating these innovating practices, it is now easier to transfer the benefits gained in terms of costs to the customers, while also ensuring that the quality of the products remain the same.
By Ramji Subramaniam, Managing Director at Sowparnika Projects
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