“Research shows that India today faces a total shortage of 24.7 million dwelling units, with more than 70 per cent of this shortage in the middle- and low-income groups. Shubh Griha is well placed to address these identified needs,” said Banerjee. “The company plans to launch housing projects in Delhi-NCR and Bangalore in the second and third phases. The price of flats for those projects will vary from that in Mumbai but will be under Rs 5 lakh,” he said.

While the pricing of the Boisar flats sounds like a dream in a city where the average price of a house is around Rs 70 lakh, the location might prove to be unattractive, some real estate experts said. But the recent overwhelming response received for MHADA flats in Mumbai and DDA flats in Delhi was a testimony to the huge untapped demand in the affordable homes segment and private players such Tata were targeting it.

A report by HDFC Securities on the housing stimulus package, which offers home loans of less than Rs 20 lakh at concessional rates, says such packages mean little unless house prices become affordable and the area of houses are lowered to below 800 sq ft. Developers also said that the Tatas are not the first to enter this segment, pointing out recent launches in Mumbai such as Tanaji Malusare City in Karjat, Rustomjee’s Global City in Virar, Neptune’s Swarajya in Ambivli, Nirmal Lifestyle’s project in Shahad and Lodha’s Casabella project in Dombivli.

Real estate consultant Knight Frank India chairman Pranay Vakil said developers are heading to the periphery to create affordable housing as land in the city comes at a premium. “In 2006-08, land in Mumbai was being acquired at the cost of a finished product. So, in such cases it is hard for developers to go in for affordable homes. Even those who are going back to the mantra of sizing and pricing by going in for affordable housing projects are not doing so for the love of it. The recession has done a lot of good, in the sense that the market has become a buyers’ market,” he said.

... contd.