Low-cost housing in Mumbai: A market at the base of the pyramid?

Wednesday, July 29, 2009

Estimates suggest that India has a shortfall of more than 25 million low-cost or affordable houses. The result is sprawling slums that ring some of the country’s largest cities and a bewildering maze of tenement buildings in which three-generations-under-one-roof-families jostle for space and privacy in spaces of 150 square feet and above. As Supriya Menon said recently, they say it is easy to find everything in Mumbai except for a house (BBC, 15 June).

Just like everywhere else across Asia, the real money in residential property development over the last two decades has been at the high end of market. Take a drive in any Asian city and chances are it won’t be too long before you are passing swanky, gated condominium developments – replete with pools, manicured grass and landscaped gardens, gyms and Italian marble (not to mention faux statues) – where well heeled locals mingle with expats (or at least those still lucky enough to be on fat expat packages – a dwindling number these days it should be noted). There’s a high chance, also, that the high-end development is right next door to dwellings straight out of Slumdog Millionaire.

But the high end of the market has lost its shine in India. Premium homes can be profitable, but not so much if buyers are scarce; which they are these days. Faced with a slowdown in the housing market, several large Indian developers have turned their attention to providing low-cost housing for middle class buyers and, interestingly, lower class as well.

Source: CSR Asia (link opens in a new window)

Base of the Pyramid, housing