Bhavika internship (2)

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An Internship Report
1. EXECUTIVE SUMMARY
The basic requirements of any person are food, clothing and shelter. The new age
real estate developer has envisioned a dream — a dream of housing every family
in the country. ‘Affordable housing’ is a term that posses the potential to
transform this dream, also harboured by millions of households, into reality.
Affordable housing includes value housing, which is the need of every middle
class family, as well as low income housing, where the most significant need of
India lies.
Focusing on this requirement, I undertook a project titled “AFFORDABLE
HOUSING IN BANGALORE- A STUDY CONDUCTED AT SOUTH CITY
PROPERTY (INDIA) PRIVATE LIMITED, BANGALORE”.
South City Property (India) Private Limited (SCPL) is a subsidiary company of
DRA which is a large real estate company having projects in Bangalore, Chennai
and Goa.
SCPL is one of the shareholders of a company called Larsen & Toubro
Southcity Projects Limited (LTSCPL) which is in turn a subsidiary of one of
India’s largest engineering companies called Larsen & Toubro Limited. The
main mission of the company is “to provide to the Indian and multinational
workforce in India, top-of the-line feature packed quality lifestyle residential and
commercial space at affordable costs.”
Currently, most of the residential developments available and underway cater to
the needs of the middle income group and the high income group segment of the
society and the needs of the lower income group are largely unmet. This study
was undertaken in order to understand the perspective of the developers as well
as the customers and to find out what exactly the customer expects. This study
also includes an in- depth competitive analysis of different companies in
Bangalore that have launched or are planning to launch Budget Housing
(Affordable Housing) in Bangalore.
St.Joseph’s College Of Commerce (Autonomous)

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Initially, studies were conducted on the development of the real estate scenario in
India. The study was then carried on by analysing the residential market in
Bangalore and the Government’s role so far in affordable housing. The study
also includes analysis of the different factors that affect the affordability quotient
in Bangalore and the home buyer’s affordability quotient analysis.
Interviews were conducted with the developers to understand the competition
and the problems faced by them on launching Budget Housing. The customers
were also interviewed in order to delve deep into the mind of customers and
identify their aspirations of buying a home. The main finding of the study is that
there is considerable amount of demand for affordable housing in Bangalore.
By understanding the requirements of the customers and the problems of the
developers certain suggestions and recommendations are made with regard to the
role of the government.

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2. INTRODUCTION
The real estate market in India is on a high growth curve, on the back of a
booming economy, favourable demographics and liberalised FDI regime. Rapid
expansion of the Information Technology sector has brought in wide- spread
socio – economic changes in the country. In India's fast-growing economy, real
estate has emerged as one of the most appealing investment areas for domestic as
well as foreign investors. The real estate sector will continue to derive its growth
from the booming Information Technology sector, since an estimated 70 per cent
of the new construction is for the Information Technology sector. Besides the
demand from the IT sector, the basic need for modern real estate would provide
lucrative opportunities for investment.
Also, it is being increasingly observed that residential prices in India are being
dictated by quality, affordability and product offering. 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.

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3. INDUSTRY BACKGROUND
3.1 REAL ESTATE INDUSTRY
THE PRESENT REAL ESTATE SCENARIO IN INDIA
The real estate sector in India is flourishing rapidly with a growth rate of 30
percent each year. About 80 percent of the real estate development in India has
been in the field of residential housing. The remaining 20 percent of the real
estate includes office, shopping malls, entertainment centres, hotels, multiplexes
and hospitals. India’s booming outsourcing business industry and consumption-
led growth are contributing significantly to its real estate growth. The
outsourcing business houses including call centres, technical consultancy
services, and medical transcription units and programming houses constituted
around 10 million square feet of real estate growth in India till 2003. In last
couple of years the share of commercial sector in the overall real estate growth
has been more prominent.
The strong fundamentals of the Indian economy are having a favourable impact
on all asset classes of Indian real estate viz. housing, commercial – office space
and retail and hospitality. High growth in services as well as manufacturing
sector has resulted in high demand for commercial and industrial real estate.
Further the economic growth has trickled down to the large Indian middle class
increasing affordability and affluence. Improving living standards are driving the
demand for better quality housing and urban infrastructure. In fact, housing in
India is today moving from being viewed as a purely basic need to an
aspirational purchase. Though high interest rates coupled with soaring property
prices have temporarily impacted affordability of home buyers the demand-
supply mismatch and low home loans to GDP ratio in India (a meagre 5 per cent
as against more than 50 per cent in US, UK and Germany) are expected to fuel

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demand for housing in the medium long run. The growth of the sector has been
complemented by favourable policy changes like liberalisation of Foreign Direct
Investment (FDI) guidelines and significant increase on investment of physical
infrastructure.
3.3 PEST ANALYSIS OF THE REAL ESTATE INDUSTRY
The real estate sector is affected by a multitude of factors, ranging from
government policies to the rising use of the internet. The sector holds a vital
position in the country and is the second largest employer after the agricultural
sector. The real estate sector is linked with over 250 diverse industry segments
that either support it or being supported by the real estate sector. Real estate
industry is a true barometer of India’s economic health.
POLITICAL FACTORS
• Presence of multiple regulatory bodies complicates real estate transactions,
but Central Government is taking steps to rationalise and simplify laws.
• Issues such as conversion of agricultural land to urban land bogged
down by political influences, creating distortions in land supply and prices
• Real estate reforms are a priority in the state agenda; some states are
computerising land records to resolve land ownership issues.
ECONOMIC FACTORS
• Increasing disposable incomes and declining real costs of loans thus
encouraging housing demands
• Increase affordability i.e. price to income ratio is declining
• Availability of multiple financing options from banks, housing finance
companies and private lending companies offering competitive rates

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• Government focus on liberalisation and increasing foreign direct
investment in real estate
• Comparatively large proportion of population in working age group. This
has added to the demand for independent dwellings both rental and
purchase
SOCIAL FACTORS
• Increasing urbanisation leading to the emergence of tier –II and tier- III
cities as centres of commercial activities. The real estate prices in these
cities are rising due to spill over demand from the major cities.
• Increasing purchasing power in the hands of younger segment of the
population, those who are willing to relocate anywhere prefer buying a
house. This has created a large pool of potential home owners who are less
debt averse than the older generation
• Rising demand for high quality real estate as urban tastes increasingly
align with international standards.
TECHNOLOGICAL FACTORS
• With rising consumer awareness on standardization, strength, safety and
quality control use of prefabricated materials that can be assembled in the
construction sites is gradually gaining importance.
• Consumers increasingly using the internet to obtain market information ,
resulting in better prices
• Shorter gestation periods with adoption of “ Ready-mix-Go” technology
in large projects

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3.4 GROWTH OPPORTUNITIES IN THE REAL ESTATE INDUSTRY
The Real Estate sector is a large, huge diversified sector, one with many verticals
such as land, design/construction, development, investment, lending etc. As India
is experiencing the growth curve, moving forward many companies will be
spawned in each of these verticals and offer great career opportunities. The
sector is very important for the government as it is a big generator of tax revenue.
Urban planning is very critical to any growing city and provides huge
opportunities and liabilities.
Real Estate development is taking place in Residential, Retail, Office, Hotels,
Warehousing and Industrial sectors. The key drivers of each of these property
types are basic fundamentals. The IT/BPO sector is expected to generate 100Mn
sft of demand for office space over the next five years. The rising middle class
and its consumer demand is driving the retail boom – around 22 malls are under
development. The large shortage in the housing sector will continue to fuel the
growth in the residential market. The real demand is not in the high end
residential market but in the affordable housing segment and this will be the
driver for the residential market.
Real Estate finance will also see growth in all areas of Public and Private: Debt
and Equity.
In the private equity space the market is currently governed by the high net
worth individuals, PE funds and closed ended funds, mutual funds (slowly
coming in). Banks and NBFC’s are the only players operating in the debt market.
Quasi-public agencies and mezzanine funds will be the next movers into this
sector. As the market grows, the private debt operators will move towards public

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equity. REITs and mutual funds will make it easier for individual investors to
invest in Real Estate and further make the risk more diversifiable for the market
as a whole. There is no public debt market in India. Players in this sector include
life insurance companies and fixed income funds that expect a more fixed
income and come into a market when it reaches a developed stage and offer their
clients a fixed income.
Overall, with further growth in the sector, career opportunities are only getting
better. There are many ways to participate in this growth - public equity, private
equity, debt development, investment, sales, research, leasing, property services,
entrepreneurial ventures, public policy, govt. agencies, planning,
architecture/engineering, investment banking etc.
The main challenges in the future also offer opportunities as they require
solutions in various forms. Urban planning is the single biggest challenge for our
cities. It is imperative that our urban infrastructure keeps pace with our economic
growth. Better roads will help bring down the supply demand gap of land in
future. Good roads will help increase supply of land and bring down property
prices. Land acquisition reforms also offer many challenges.
Astronomical government stamp duty rates increase property transfer costs and
high costs come in the way of securitized debt market and efficient mortgage
markets.

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3.5 INDIAN RESIDENTIAL SECTOR AND THE FACTORS
CONTRIBUTING TO THE GROWTH OF THE SECTOR
The Indian economy and the real estate sector in particular are high on its ride to
prosperity. As India’s economic growth curve rises, real estate India has emerged
as one of the most appealing investment areas for domestic as well as foreign
investors. Indian real estate has huge potential demand in almost every sector,
but especially commercial, residential, retail, industrial, hospitality, healthcare
etc. But maximum growth is attributed to its growth from the booming IT sector,
since an estimated 70 per cent of the new construction is for the IT sector.
The residential sector in India has undergone a far-reaching metamorphosis in
the last decade. After years of unplanned and haphazard development, the sector
is now marked by enhanced product offering, heightened investment including
foreign capital, and augmentation of the national footprint of some prominent
Indian developers. Modern apartments and villa and township projects have
come up across the country and new city master plans have been drawn to
include a number of suburban and peripheral locations within the city’s folds.
Residential segment is leading the growth trajectory of the fast expanding real
estate sector in India. Nearly 75-80% of the total real estate space development
across India is in the residential segment. Rapid urbanization, increase in number
of households, rising income levels, and easy availability of housing finance are
the chief reasons cited for this trend. Tremendous growth has been taking place
in both residential as well as commercial segments that is attracting huge
investments phenomenal price escalation (more than 100% in several places) in
last couple of years.

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Some of the key factors lending momentum to the Indian residential sectors are:
• According to United Nations Population Fund (UNFPA), India’s
urbanization rate is higher than the world average, and by 2030 more than 40%
of the country’s population will be living in urban areas. This, together with the
fact that the average household size in India is fast decreasing, has fostered
residential demand in recent times.
• Also, salaries in India have been rising at the rate of 10-15% per year
and the per capita disposable income that has increased manifold in the past
decade is expected to further grow by 8-13% in the next five years. Thus,
improved affordability and the increased penetration of housing mortgage
finance have led to the unprecedented housing acquisition drive both by end-
users and investors.
• There is an unabated demand and supply-demand gap which has led to
spiralling of capital values across locations and cities.
• Investment scenario has certainly undergone a paradigm shift in India.
Returns from rental incomes on investment in commercial property in Indian
metros, is around 10.5%, the highest in the world.
• Lower interest rates, easy availability of housing finance, burgeoning
income and better job prospects, increase of nuclear families have given a boost
to the demand for residential properties in India. The net yields (after
accounting for all outgoings) on residential property are currently at 4-6% p.a.
However, these investments have benefited from the improving residential
capital values. As such, investors can count on potential capital gains to
improve their overall returns.

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•The retail market in India has been growing due to increasing demand from
retailers, higher disposable incomes and opening up of FDI in Retail. The capital
appreciation in this sector is close to 20-35% p.a. However, the risks associated
with this sector are higher as retailers are prone to cyclical changes typical of a
business cycle.
Some of the key facts of the Indian residential sector are:
Selling and buying Indian property is considered as the most profitable and
attractive business opportunity in the present real estate scenario in India. New
demands have added to strength of real estate markets across the commercial,
residential and retail sectors in India. The demand for Indian property has been
increasing steadily for the past few years and it has exceeded supply.
There has also been an upward swing on the real estate price values in the recent
years. Due to the huge demand and rising prices, investment and speculative
interest in real estate is growing while excess money supply, stock market gains
and policy changes are adding to the trend in favour of the real estate sector.
1. In the last one year, the capital values of the commercial office spaces has
increased by up to 40% owing to the increase in the demand from IT / ITES and
BPO sector across major metros in India.
2. India has a distinct regulatory and financing management in place.
3. Real estate boom in India is supported by its own flourishing economy on a
sustainable basis. Here, growth of the property market is not a result of
renovation and overhauling; but rapid development that witness for India riding
the high growth wave.

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3.6 MARKET OVERVIEW OF BANGALORE
Bangalore is a fast growing metropolis and has undergone many changes over
the past 4 years. Increased commercial investments have meant more traffic,
more burdens on infrastructure and an increase in demand for real estate space in
the city. The housing need of people has also changed over the years with more
apartments, villas and residential enclaves coming up within the city and city
outskirts.
This is a brief market overview of Bangalore and the residential market in
Bangalore:
• Bangalore has a highly evolved real estate market and a developing
infrastructure.
• Karnataka government has an IT policy and BPO policy that spell out the
support provided to the IT-ITES sector.
• Bangalore is the 4th Largest Technology Cluster in the world after Silicon
Valley, Boston and London – (Hindustan Times, March 8, 2007)
• Altitude of 950m above sea level
• Salubrious climate
• Earthquake Zone II - Least susceptible to damage
• Literacy Levels – 82.96%
• Languages Regional – Kannada. Others - English, Hindi, Telugu & Tamil.

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KEY DEMOGRAPHICS AND SOCIO ECONOMIC INDICATORS OF
BANGALORE
Population (2008) 5,281,927
Income per capita Rs. 6313
Literacy level 85.74%
Higher educational institutes at
State level
1.528 (103 R&D units, 11 universities, 181
polytechnic colleges, 600 industrial training
institutes, 114 medical and paramedical colleges,
135 engineering and
838 degree colleges)
Leading sectors IT/ITES, Biotechnology, Telecommunication,
Financial services, Aerospace, Automobile, Tourism
Leading operational firms Infosys, TCS, Wipro, IBM, Accenture, Microsoft,
Intel, Oracle, Motorola, TI, HP, I flex, Cisco, SAP,
Philips, Biocon, Sartorius, Syngene, Avesthagen
HSBC, Fidelity, Ernst& Young, Citi Bank,
Bank of America, ANZ, Deutsche Bank, ABN Amro
*Source: Market Skyline of India, 2006-07, Indicus Analytics Pvt Ltd, JLLM
World Winning Cities, www.Indicus.net

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SCOT ANALYSIS OF BANGALORE
STRENGTHS
• High levels of ‘brand recall’ among global corporations.
• Ranked the Second best City to do business in India*
• High Availability of Quality Workforce with diverse skill sets and
varied experience, resulting in mature and established service delivery
capability.
• Salubrious climate and cosmopolitan nature.
• Emergence of Pan India Developers & Low Barrier to entry for New
Developer
CHALLENGES
• Rising Accommodation Costs though less than other metros.
OPPORTUNITIES
• Scale up of available infrastructure to become a leading global
technology hub.
• Only sub dollar rental level city.
• High urbanization rate.
THREATS
• Competition from tier III cities like Mysore, Mangalore etc.

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MARKET CLASSIFICATIONS AND CHARACTERISTICS
CBD: Central Business District
• MG Road
• Residency Road
• Richmond Road
• Cunningham Road
SBD: Secondary Business District
• Koramangala
• Indiranagar and CV Raman Nagar
• Old Madras Road
• Airport Road
• Bannerghatta Road
• Outer Ring Road
PBD: Peripheral Business District
• Whitefield
• Mysore Road
• Hebbal/Bellary Road
• Electronic City
RESIDENTIAL MARKET IN BANGALORE

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The residential market in the city is upbeat, both in suburban and peripheral
locations. The central business district (CBD) continues to cater to the demand
for the premium segment at a steady pace while the suburbs have largely catered
to the middle and upper middle income segments, offering large residential units
with amenities like large open spaces, sports facilities and clubs. The
development of an IT corridor in Whitefield has had far-reaching effects on the
housing sector as well. The increasing demand for housing can be attributed to
large scale migration of IT professionals, new employment opportunities and rise
in corporate activity like expansion and relocation of companies, which has
continued to put pressure on housing.
OVERVIEW OF THE RESIDENTIAL MARKET
The real estate sector in the city is on a constant growth curve. The capital values
in the Bangalore residential market have gone up by 3-12 percent. Micro markets
in and around the CBD areas like Langford Town, Lavelle Road and Brunton
Road have witnessed an appreciation in capital values by nearly 12 percent due
to limited availability of new residential developments and land parcels. In the
peripheral locations, however, availability of large land parcels has led to the
development of theme-based luxurious villas and high-end residential enclaves.
Several integrated townships projects are being taken up by builders. A mega
township is coming up near Devanahalli with 1,000 exquisitely designed
bungalows. A Vancouver based company is coming up with a huge residential
project near the new international airport.
A supply of approximately10 million sq.ft. is expected in this region in the next
two to three years. The average capital value here ranges from Rs 3,000 to Rs
5,000 per sq.ft. The availability of large land parcels and improved connectivity
due to the four-laning of Bellary Road and the proximity to the international
airport are the major growth drivers here.

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Real estate prospects in areas like Sadashivanagar, Jayamahal, RT Nagar,
Hebbal, Bellary Road, Dasarahalli, Jalahalli and Tumkur Road are likely to
benefit from this in the coming years.
The improvement in road connectivity from Hoskote, Whitefield and Tumkur
Road to North Bangalore will also result in increased residential development
along this stretch. Major developers are planning huge projects here. The Metro
is also likely to play an important role with increased residential developments
surrounding the terminals along the metro route.
The average capital value in locations like Jayanagar, Bannerghatta Road,
Banashankari, Kanakapura Road, HSR Layout, Hosur Road and Koramangala
varies from Rs 3,000 to Rs 6,000 per sqft. There is a high concentration of
residential projects along the Sarjapur-Outer Ring Road due to its proximity to
the IT corridor. The Bangalore-Mysore Infrastructure Corridor project and the
upcoming Knowledge City have attracted prominent builders and developers to
this region. There are major residential projects coming up along Kanakapura
Road too.
OUTLOOK
The upcoming international airport and road projects being taken up to increase
connectivity will give further impetus to the real estate sector here. Developers
have acquired large land parcels in and around Devanahalli, Bellary Road and
Hoskote for integrated townships and residential enclaves. Anticipating the
potential of the residential market here in the city, the government has planned to
set up five satellite townships, promoting the 'walk-to work' concept. An
integrated township is being planned in Bidadi.
High investment returns from the residential sector is another driver for
augmentation of the residential sector. With more developers entering the
market, the residential skyline is likely to witness a fresh dose of growth,
especially in Bangalore North and in peripheral locations around the city.

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FUTURE OF BANGALORE - THE NEW MASTER PLAN 2015
The future of Bangalore certainly draws connections from the Bangalore
Development Authority’s Master Plan 2015. Bangalore’s new master plan has
been notified recently. The plan allows for flexible zoning system and mixed use
development, paving the way for commercial activities to be carried out in places
earmarked as residential zones.
The Plan comprises broadly of two parts. One pertains to the vision for the future
development of Bangalore and the second to the land use plan and zoning
regulations. The Vision Document deals with the long term development and the
strategic interventions needed to deal with the demographic, physical and
economic growth of the city.
The strategies in the housing sector include moving from plotted housing to
group housing for optimum utilisation of land, budget housing to meet the needs
of the urban poor and encouraging private sector participation. The urban poor
are to be provided basic services including security of tenure at affordable prices.
The Master Plan does recognizes the growth impulses beyond the metropolitan
area and the future growth patterns defined by large projects such as Bangalore
International Airport, IT corridor, Metro Rail, Bangalore-Mysore Infrastructure
Corridor, integrated townships, peripheral ring road and provides for an increase
in space allocation for different activities.
The plan has estimated the availability of about 3890 acres of land in West Zone
for the purpose of Group Housing, layout formation and other service projects.
An area of around 4560 acres has been set aside for development as an inclusive
composite zone i.e. providing for both work place and residence in one place
and the entire area around the Industrial Zone to be considered as developmental
block.

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3.7 AFFORDABLE HOUSING
Affordable housing is a term used to describe dwelling units whose total
housing costs are deemed "affordable” to a group of people within a specified
income range. Although the term is often applied to rental housing that is within
the financial means of those in the lower income ranges of a geographical area,
the concept is applicable to both renters and purchasers in all income ranges.
Affordable housing is generally defined as decent, quality housing that costs no
more than 30% of a household's gross monthly income for rent/ mortgage and
utility payments. Housing costs considered generally include taxes and insurance
for owners, and usually include utility costs. When the monthly carrying costs of
a home exceed 30–35% of household income, then the housing is considered
unaffordable for that household.
AFFORDABLE HOUSING IN INDIA
Affordable Housing in India has become the new Mantra for everyone related to
the realty sector in the country. From buyers to the sellers to the realtors and

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investors, everyone is pitching for affordable quality homes in India. The story
begins from the realization of the huge unmet demand for affordable housing in
India since the premium section is witnessing an oversupply. As the real estate
property market experienced recession in late 2008 with a downfall of up to 50%
in property prices, various realtors have started looking for measures to take
control of the situation.
For the ongoing projects, the prices have already fallen down by around 15% in
major metropolis cities like Delhi, Mumbai, Hyderabad, Bangalore, Kolkata,
Chennai, Pune, Gurgaon, Noida, Greater Noida etc. In terms of the completed
projects the prices have hit a low of more than 43% in major property markets of
the cities. Since the economic slowdown has resulted in bringing down the
commodities prices as well, the cost of construction has also come down. The
fall in cement prices by over 40% and steel prices by around 20% that constitute
a major chunk of construction costs has compelled the developers to pass on the
benefit to the end buyers. Thus, the demand of affordable quality homes in India
within the price range of Rs. 15 – 30 Lakh is soon to become a reality.
During various national and international conferences held in the country,
indications regarding increased FDI in Realty Markets in India increase in
number of available Real Estate Funds and reduced interest rates on Home Loans
have surfaced. Various Banks have also announced reduced rates for loans to the
real estate developers for affordable housing projects in India. To cater to
excessive unmet demand of low budget housing in India, The Planning
Commission, RBI, The Finance Ministry and various Financial Institutions have
extended full cooperation to the realtors to jointly
Various builders in India have announced projects catering to the low budget
housing in India with 1 & 2 BHK apartments’ projects targeting the Lower
Income Groups and EWS (Economically Weaker Section) Categories as well as

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affordable 3 & 4 BHK flats for the Middle Income Groups. The Individual Unit
prices of the houses under the affordable housing projects in India are touted to
be around Rs. 5 - 25 Lakhs for 1 & 2 BHK Flats, Rs. 25 – 40 Lakhs for 3 BHK
and Rs. 40- 60 Lakhs for 4 BHK Units.
AFFORDABLE HOUSING IN BANGALORE
In Bangalore, the residential market is witnessing a slowdown as potential buyers
wait in anticipation that home prices, which have dropped over the last year, will
continue to decline. Developers are doing everything possible to boost sales —
discounts in prices couched in schemes such as bearing 2-3% of the interest cost,
flexible rates for parking, floor rise pricing as well as throwing in freebies,
including semi-furnished homes. As the realty sector rushes into affordable
housing to survive the slowdown, Bangalore-based firms too are innovating to
cut costs and delivery time to contain the interest factor. 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, Yelankha, 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 international airport,

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Metro Rail, elevated roads and underpasses improved connectivity to these
localities, sending realty prices upwards.
NEW SEGMENTS OF HOMEBUYERS
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
bought 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.
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 home buyers. 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.

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4. GOVERNMENT’S ROLE IN AFFORDABLE HOUSING
4.1 INTRODUCTION
Shelter is the basic human requirement that needs to be met on priority basis.
Housing policies and programmes, while accepting that housing is essentially a
private activity, has to recognise that state intervention is necessary to meet the
housing requirements of the vulnerable sections and to create an enabling
environment in achieving the goal of “Shelter for all” on self sustainable basis.
Some of the functions performed by the Government to encourage affordable
housing are as follows:
1. To develop and promote Housing & Real Estate Sector.
2. To identify and strengthen industry's role in the economic development.
3. To evolve criteria of real estate and construction industry and its various allied
operations, to formulate a code of Ethics for observance by all real estate

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developers, builders and marketing operators and to evolve a suitable
ombudsman mechanism for investigating departures there from.
4. To set up a National Institute of Real Estate Development (NIRED) as a centre
for studies, research, training and certification.
5. Promotion and encouragement of co-operation among all enterprises dealing
with and engaged in various aspects of real estate development.
6. To create awareness and support industry's efforts on quality, environment and
consumer protection.
7. To promote excellence and high standards of operations based on just and
equitable principles in transactions relating to various operations of real estate
business including building, construction and marketing.
4.2 NATIONAL HOUSING BANK (NHB)
The National Housing Bank (NHB) was established on 9th July 1988 under an
Act of the Parliament viz. the National Housing Bank Act, 1987 to function as a
principal agency to promote Housing Finance Institutions and to provide
financial and other support to such institutions. The Act empowers NHB to:
• Issue directions to housing finance institutions to ensure their growth
on
sound lines
• Make loans and advances and render any other form of financial
assistance to scheduled banks and housing finance institutions or to
any
authority established by or under any Central, State or Provincial Act
and engaged in slum improvement and
• Formulate schemes for the purpose of mobilisation of resources and

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extension of credit for housing
VISION
NHB ensures a sound and healthy housing finance industry in India through
effective regulation and supervision of housing financing institutions. NHB is
known for its commitment, innovation and quality of service offering a broad
spectrum of financial products to address the needs of housing sector with
motivated employees working in a congenial and participation work
environment.
OBJECTIVES
NHB has established to achieve the following objectives:
a. To promote a sound, healthy, viable and cost effective housing
finance system to cater to all segments of the population and to
integrate the housing finance system with the overall financial system.
b. To promote a network of dedicated housing finance institutions to
adequately serve various regions and different income groups.
c. To augment resources for the sector and channelize them for housing.
d. To make housing credit more affordable.
e. To regulate the activities of housing finance companies based on
regulatory and supervisory authority derived under the Act.
f. To encourage augmentation of supply of buildable land and also

1
building materials for housing and to upgrade the housing stock in
the country.
g. To encourage public agencies to emerge as facilitators and suppliers
of serviced land, for housing.
4.3 KARNATAKA HOUSING BOARD
INTRODUCTION
Karnataka Housing Board was established under Karnataka Housing Board Act
1962 as a successor to the Mysore Housing Board, which was constituted in the
year 1956. The primary objective of KHB is ‘to make such schemes and to carry
out such works as are necessary for the purpose of dealing with and satisfying the
need of housing accommodation’. With this directive KHB endeavours to
provide Housing to the people of Karnataka at affordable cost and therefore, is
the most important agency for housing throughout Karnataka.
VISION
“To improve quality of life by establishing self-contained communities with
State – of – the art amenities that is in harmony with the environment.”

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MISSION
• To provide sustainable, equitable, eco-friendly, acceptable and affordable
housing.
• To constantly improve delivery and quality.
• To constantly strive to work for customer satisfaction.
• To provide efficient urban infrastructure services.
• Function in a manner that is transparent, customer friendly, consultative and
participative.
ADMINISTRATION
The Board consists of 7 official members and 6 non – official members including
Chairman. The government has appointed presently 5 non – official members
including Chairman. The Government of Karnataka nominates the Chairman and
appoints the Housing Commissioner, Chief Engineer (General Manager –
Technical), Secretary (General Manager – HRD), Controller of Finance (General
Manager – Finance) and Deputy Commissioner Recovery (General Manager -
Recovery). The Housing Commissioner is the Chief Executive and
Administrative Officer as per the Act.
Some of the Karnataka Housing Board Schemes include:
• Composite Housing Schemes
• Labour Housing Schemes
• Group Housing Schemes
• Multi-storey Apartment High Rises
• Satellite Townships
• Commercial Centres

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• Office Complexes
KHB provides housing facilities to all at affordable prices under the LIG
(Lower income group), MIG (Middle income group) and HIG (Higher
income group) categories. The basic infrastructure facilities that follow by
KHB Karnataka include asphalted roads, electricity and drinking water
supply, adequate sewage and drainage system etc. The townships developed
by Karnataka Housing Board also include commercial complexes and in the
bigger projects even entire Commercial Plazas are planned with provision for
retail outlets, entertainment zones and small offices are provided. The
maintenance of these amenities is the responsibility of KHB until it hands
over the Scheme to the local Municipal Authority.
PRODUCTS:
KHB undertakes layout formation, housing schemes and land development
schemes as envisaged in the Act and subject to the control of the State
Government. The schemes are: - Composite Housing Schemes (CHS) - Group
Housing Schemes - Multi-storeyed Apartments - Labour Housing Schemes -
Sites & Services Schemes -Satellite Towns - Layouts and - Commercial Plazas
6. RESEARCH DESIGN
6.1 INTRODUCTION
Research can be defined as a scientific and systematic search for pertinent
information on a specific topic. In fact research is an art of scientific
investigation. Research is an original contribution to the existing stock of
knowledge making for its advancement. It is the pursuit of truth with the help of
study, observation, comparison and experiment. Research includes stating the
problem, formulating a hypothesis, collecting the facts or data, analysing the
facts and reaching certain conclusions either in the form of solutions towards the
concerned problem or in certain generalisations for some theoretical formulation.

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Marketing Research is a systematic gathering and analysis of data regarding
marketing problems to facilitate decision making and control in marketing goods
and services. Marketing Research activities are carried out in connection with
management of marketing work.
Research design is a plan, structure and a strategy of an investigating process
which sets out to obtain research answers to the research questions. In other
words, research design is an arrangement of conditions for collection and
analysis of data in a manner that aims to combine relevance to research purpose
with economy in view. The basic purpose of research design is to provide
answers to research questions and to control variances.
6.2 STATEMENT OF THE PROBLEM
Affordable Housing in India has become the new Mantra for everyone related to
the realty sector in the country. From buyers to the sellers to the realtors and
investors, everyone is pitching for affordable quality homes in India. The story
begins from the realization of the huge unmet demand for affordable housing in
India since the premium section is witnessing an oversupply.
South City Property (India) Private Limited is a truly leading real estate group
with considerably large real estate holdings and large residential and commercial
on-going projects. Looking at the current market situation the company has
decided to launch budget housing in Bangalore i.e. ensuring affordable housing
in Bangalore. Affordable housing has always been on top of any home buyer’s

1
priority list. In order to delve deep into the mind of customers and identify their
aspirations of buying a home, South City Property decided to conduct a market
research and check the feasibility of launching such a project in Bangalore.
In this study an attempt is made to analyse the views of the customers and
developers towards affordable housing and also analyse the competition in
Bangalore with regards to affordable housing.
6.3 TITLE OF THE STUDY
A study on “Affordable Housing/ Budget Housing- conducted at South City
Property (India) Private Limited, Bangalore”
6.4 REVIEW OF LITERATURE
In an attempt to understand the different concepts of Real Estate and affordable
housing many books were referred to. The company’s records also helped to
bridge the gap for the project and helped in providing vital inputs for the project.
6.5 OBJECTIVES OF THE STUDY
PRIMARY OBJECTIVES
• To delve deep into the minds of the consumers and access their views on
affordable housing in Bangalore.
• To find out what is the budget of a customer.
• To suggest improvements on the study and to provide solutions if the
company will face in problems when launching Budget Housing in
Bangalore

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SECONDARY OBJECTIVES
• To conduct a competitive analysis on different companies that have launched
or are planning o launch budget housing in Bangalore.
• To assess the views of the developers with regard to the slowdown in the
residential real estate market affordable housing and the government’s role in
the same.
• To assess their views on the future that lies in store for the real estate market
in India and specifically Bangalore.
6.6 SCOPE OF THE STUDY
The study was confined to South City Property Developers Limited, Bangalore
and was limited to assess the views of the customers and developers. The study
was exclusively conducted for the customers and developers in Bangalore.
6.7 RESEARCH METHOD
 Of the various methods of research, the research has been based upon the
survey method. Developers and customers were interviewed with the
research tool- questionnaire.
 Tele- calling interviews were conducted for both customers and
developers.
 The total number of valid respondents i.e. customers, chosen for analysis
were 50.
 The total number of developers interviewed was 14. The developers were
chosen on the basis that whether they have launched or are planning to
launch budget housing / affordable housing in Bangalore.

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6.8 SOURCES OF DATA
Primary as well as secondary data is compiled in the report.
The primary data includes the views of customers and developers through Tele-
interview and also by the means of questionnaire.
Secondary data was collected for the sections of the report pertaining to the
industry background, government’s role in the housing sector, specifically
affordable housing sector and the company profile trough published articles
,internet and newspaper.
6.9 LIMITATIONS OF THE STUDY
• Time is one of the limitations of the study, as it had to be carried out within a
stipulated period.
• The analysis is based on the assumption that the respondents have accurate
information.
• The study is limited only for the city where the study has been undertaken i.e.
Bangalore.
• The sample size of customers was limited to 50 and the sample size of the
developers was restricted to 14.
• The study limits to those companies that have launched or are planning to
launch budget housing in Bangalore.
• The study limits mainly to the housing industry and specifically the
affordable housing sector.

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CHAPTER SCHEME
1. INTRODUCTION
This chapter is introductory in nature and provides a bird’s eye view of the
project.INDUSTRIAL BACKGROUND
This chapter deals with the real estate scenario in India. This chapter also
includes an overview of the residential market in Bangalore.GOVERNMENT’S
ROLE IN AFFORDABLE HOUSING

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This chapter covers the various programmes undertaken by the government with
regard to affordable housing.
2. RESEARCH DESIGN
Various topics such as the statement of the problem, specific objectives of the
study, scope, research method, sources of data and limitations of the study are
covered
3. COMPANY PROFILE
This chapter provides a brief insight of the company, its vision, mission
statement, quality statement and the road ahead.
under this chapter. PERSPECTIVE OF THE DEVELOPERS
The views of the developers coupled with a brief profile of the developers
interviewed are covered in this chapter.PERSPECTIVE OF THE CUSTOMERS
By studying the data acquired from the survey, analysis of the views of
customers are made in this chapter.
4. COMPETITIVE ANALYSIS
An in depth competitive analysis is conducted in this chapter including all the
companies that has launched or is planning to launch budget housing in
Bangalore.
5. AFFORDABILITY QUOTIENT ANALYSIS
This chapter includes analysis of the different factors that affect the affordability
quotient in Bangalore and the home buyer’s affordability quotient analysis.
6. FINDINGS AND RECOMMENDATIONS
Findings from the survey conducted and the analysis is mentioned in this chapter
along with some recommendations to enhance the development of affordable
housing.
7. CONCLUSION
Based on the findings of the study, conclusions are made in this chapter.
8. LEARNINGS

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This chapter describes what I learnt during the course of my summer internship
at South City Property (India) Private Limited.
5. COMPANY PROFILE
5.1 BACKGROUND
South City Property (India) Private Limited (SCPL) is guided by the principles of
"value" investing. This reflects in the attitudes of every member of the SCPL
team, through their properties, location and ultimately in the sustainable value
proposition offered to their clients and investors. The focus of the company is on
"value for money" properties both within and on the outskirts of the cities. SCPL

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typically focuses on developments of 5+ acres within city limits and integrated
developments of 100+ acres on the outskirts.
The company’s commitment to innovation, quality and ultimately customer
satisfaction drives them to excel in every phase of property development - either
through internal excellence creation or through partnerships with leaders in
specific aspects.
SCPL is a subsidiary company of DRA which is a large real estate company
having projects in Bangalore, Chennai and Goa. SCPL is one of the shareholders
of a company called Larsen & Toubro Southcity Projects Limited (LTSCPL)
which is in turn a subsidiary of one of India’s largest engineering companies
called Larsen & Toubro Limited.
LTSCPL has its registered office in Chennai with a team of 50 people. Currently
they are executing one of Chennai’s largest Integrated Township the first phase
of which is called ‘Eden Park’. The total project size envisaged by the company
is about 8.5 million square feet of development and the master plan for the
development is being done by HOK architects of the US which is one of the
leading architectural firms in the world.
Up until now the company’s focus was on luxury and semi-luxury developments
including the leisure segment with its planned projects in Goa. Keeping in mind
the developments in the general economy, the company has decided to foray into
the budget housing/ affordable housing segment which is seeing a massive
demand due to the dynamics of the middle income strata of the Indian
demography.
Future focus area – Budget Housing / Affordable Housing

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5.4 QUALITY STATEMENT
SCPL provides best in class infrastructure to meet highest levels of
changes caused by climate, usage and stress.
5.5 COMMITMENT
To provide to the Indian and multinational workforce in India, top-of
the-line feature packed quality lifestyle residential and commercial space
at affordable costs.
5.6 VALUE PROPOSITION AND THE ROAD AHEAD
Value Proposition of SCPL is that of an organization that covers the entire life
cycle of real estate development in India.
• From land selection to land amalgamation,
• From title clearances to overall registration,
• From project approvals to project development,
• From marketing to sales,
5.2 VISION
“To be among the top ten real estate and property brands in India by 2015 in
turnover, quality, reliability and brand image.”
5.3 MISSION
“To provide to the Indian and multinational workforce in India, top-of
the-line
feature packed quality lifestyle residential and commercial space at
affordable costs.”

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• SCPL ensures the completeness of the project.
5.7 THE ROAD AHEAD
• Large Integrated Townships - with residential, commercial and mall
developments.
• Lifestyle development to address the growing demand for premium
product.
• Annuity yielding investments like hotels, malls and commercial
developments.
• Geographical focus - South India
• Rapid expansion and scale-up through project level equity partnerships
with investors and company level strategic partnerships.
• To undertake development and land bank building exercise in Tier-II
and Tier-III cities.
7. PERSPECTIVE OF THE DEVELOPERS
7.1 INTRODUCTION
The research was conducted by choosing those small developers that have
launched or are planning to launch budget housing/ affordable housing in
Bangalore.
The objective of the study was to understand various construction technologies to
minimise construction costs and developers’ expectations in terms of subsidies
and incentives from the government and finally, to know about their ongoing
affordable housing projects in Bangalore, if any.

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7.2 BRIEF OVERVIEW OF THE DEVELOPERS INTERVIEWED
1. OZONE GROUP
The Ozone group is fast emerging as a new force in the Indian real estate market
and becoming the preferred choice of a discerning buyer, whether of a home or a
commercial establishment. The Group offers to a home-buyer, a wide range of
high-end residential condominiums, row houses, serviced sites and independent
villas. In the commercial sector – the group specialises in building IT parks,
retail malls, and integrated townships to commercial and hospitality
developments. The Ozone group currently have projects in three cities viz.,
Bangalore, Chennai and Goa.
Ozone group is a real estate developer enabling a better quality of life for
discerning customers by redefining standards. The Group is a professionally
managed organization comprising of finance, engineering, legal, commercial and
marketing professionals. The current strength of the group is 175 people.
2. MAHAVEER HOMES
Mahaveer Homes from Reddy Structures is a Bangalore based Real Estate
Company started in 1997 under the able leadership and guidance of its founder
and managing director Mr K. Praveen. Built on a wealth of experience, earning
an excellent reputation for elegantly designed and crafted developments of high
quality homes, Mahaveer Group provides new home buyers a quick and easy
access to the most comprehensive database of home developments on the web.
Every Mahaveer Home is a unique blend of comfort and efficiency. It is a joint

1
effort of a team of dedicated and enterprising professionals, who truly understand
what it takes to build the home that is very close to their customer’s heart.
Mahaveer projects have become a landmark in many ways, winning great
compliments from customers as well as discerning critics. Though a
comparatively new entrant to the ever increasing property skyline of Bangalore,
it has already won laurels for its motto of “Finest Apartments with Honest
Practices”. Mahaveer Homes is an extremely customer motivated group, which
aspires to provide top quality construction services to a large number of
customers.
3. GOLDEN GATE PROPERTIES
Golden Gate Properties Ltd is a Bangalore based Public Limited Company which
started its operations in 1997. In a short period of time it has emerged as one of
the leading developers in South India with its excellent projects of outstanding
quality, reliability, affordability and efficient after sales service. The Company is
having 7 ongoing projects worth Rs.1500 crore and poised to launch 10 different
Projects, at strategic locations of Bangalore, Chennai and Hyderabad. These
projects will have total inventory of 10,000 units. In the current financial year
two SEZ’s (Special Economic Zones) with proposed built-up area of 6 million
sq.ft. are also planned.
The company engages various national and international architects (like HOK,
USA) for its projects. It has its own team of construction and for mega projects it
utilizes the services of renowned construction agencies.
It is one of the leading property developers in Bangalore and Hyderabad with a
focus on Residential Apartments and Villas. The company strives to provide a
comfortable and happy living for their customers through all their projects.
4. CONFIDENT GROUP

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Confident Group is one of the fastest growing conglomerates, headquartered in
Bangalore with multinational operations spread across Dubai, Bangalore, Kochi,
and Trivandrum.
Confident Group has six diversified verticals: Infrastructure, Hospitality,
Aviation, Entertainment, Education and Health care.
The Group is currently implementing 48 Infrastructure projects which include
Gated community of Townships, Villas, Apartments, Commercial Towers,
Software Towers, Hotels and Resorts. The Group is also implementing multiple
Hotels and Resorts across South India and is also setting up the largest chain of
Hotels and Resorts in Bangalore. The Group is also setting up three schools
across Bangalore to facilitate easy education facility for Confident Customers.
Confident Group is one of the few developers who make land purchases strictly
by cheque payments. Being a “Zero Debt” company, Confident Group would be
on the top of Income Tax Payers in its field of operations in a couple of years."
The Group has in-depth quality and systems orientation and is accredited with
ISO 9001, 14001 and 18001. The Group is also a “Zero Debt” Group. The entire
Group owns implements and operates all its operations without any external debt
and is therefore a "Zero Debt" conglomerate."
5. PARAS GROUP
Mr. Ashok G. Chopra, Mr. G. Madan Mohan Reddy, Mr. Srinivas Reddy and
Mr. Subba Reddy founded Paras Group in 2004 with the objective of developing
and constructing residential apartments in Bangalore. Amongst themselves, the
company has inherited a vast experience in marketing, construction, civil
engineering and contracting. The company’s projects are engineered and
architected by S'n'S Associates of Hyderabad, who are pioneers in this field. The

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company is a fast growing company catered for the working class for the city of
Bangalore . The prime objective of the company is to provide quality housing at
an affordable price and increase the level of living to a different league.
6. JANAPRIYA ENGINEERS SYNDICATE
Janapriya Engineers Syndicate was founded by Mr.K.Ravinder Reddy where
value for money is the cornerstone of the company. Janapriya specialises in using many innovative
methods to help deliver more in every square foot the company builds. Janapriya specialises in investing in land areas that would
emerge as the real estate destinations of the future; employing newer technology from across the world; evolving self reliant building
practices; to investing time and effort into building a stronger and more competent people force to achieve their goal.
The company is currently pursuing projects named Janapriya Metropolis, Janapriya Arcadia, and Janapriya Utopia etc.
7. PURAVANKARA
The Puravankara group was established in 1975, in response to the growing need
for quality housing and commercial space in the metropolitan cities of India.
Since then, the Group has grown to be one of the leading Real Estate Developers
of the country, serving the needs of a discerning clientele. Today, the Purvankara
Group commands more than 3 decades of construction expertise. The company’s
operations cover Bangalore, Kochi, Chennai, Coimbatore, Hyderabad, Mysore,
Colombo and the United Arab Emirates (U.A.E). The company has completed
many residential and commercial projects covering approximately 4.73 million
sq.ft. of saleable area. The company currently have 18.78 million sq. ft. of
developable area in both their residential and commercial projects under
construction. Top-notch quality in construction and design is the hallmark of
every Puravankara creation.
8. BINDU PROMOTERS

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Bindu Promoters and Developers is a Bangalore-based construction company
executing residential and commercial property that has created wealth for its
customers through steady appreciation triggered by ideal location, quality
construction and overall aesthetics. Bindu Promoters & Developers are
committed to design, develop, construct and market Residential, Commercial
complexes which shall meet customer need consistently from the past 15 years.
The company strives to enhance the interest of their partners, employees,
suppliers & society. Bindu Promoters are synonymous with quality construction in Bangalore. The
company is known for maintaining Standard & Quality construction and also for its ethics, transparency,
reliability, professionalism and reflexivity.
9. INNOVATIVE CONSTRUCTIONS
Innovative Construction Inc has been building and or framing custom and semi-
custom homes for over 20 years. The company puts quality, ingenuity, and
integrity into all of their work. The company believes in delivering the best to its
customers.
10.DEFINER VENTURES
Established in 1997 by Mr.Ravi Varma, Definer Ventures is head-
quartered at Bangalore. The company true to its name is all about
quality & perfection.
Definer Ventures has redefined the benchmark for affordable housing
(less than 20 lakhs) by providing top of the line specifications and all
the amenities which were found in High end apartment projects where
each flat costs 40 lakhs onwards.
Some of the projects of the company are Definer Residency, Definer
Serene Drive –I , Serene Drive II and Definer Pearls.

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DEVELOPER’S PERSPECTIVES
To understand the concept of affordable housing from a developer’s standpoint,
interviews were conducted with developers. The objective of the study was to
understand various construction technologies to minimise construction costs and
developers’ expectations in terms of subsidies and incentives from the
government and finally, to know about their ongoing affordable housing projects
in Bangalore, if any.
Some of the key findings of interviews with the developers in the city include the
following:
• More efficient and quick regulatory approval process to ensure timely
commencement and completion of the project. This would reduce
developer’s holding cost and in turn improves project Internal Rate of Return
(IRR).

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• Subsidies on service tax, registration charges, stamp duty, and VAT
• Provision of additional FSI for building affordable homes
• Use of more effective construction technologies by use of pre-cast
construction techniques to reduce construction time.
• Developers are actively considering reducing the unit sizes to increase
affordability
• Infrastructure initiatives such as road connectivity, water, electricity by the
Government to support housing projects.
Apart from the above inferences, majority of the developers interviewed also
offered to curtail their margins by a moderate percentage upon the government’s
attention to their proposals.
The developers think that there exists a big market for affordable homes because
of the huge requirement of the same. According to the developers, the future
could be improved with better infrastructure and by maintaining a good price
line.
8. PERSPECTIVES OF CUSTOMERS
Exhibit 1: PRODUCT PREFERENCE: What type of house have you bought
or are you looking for

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10%
32%
58%
1bhk 2bhk 3bhk
Product preference Total
1bhk 5
2bhk 16
3bhk 29
Grand Total 50
Analysis and Inference
10% of the respondents prefer 1bhk flat
Majority of the respondents interviewed prefer a three BHK flat when compared
to a one BHK or a two BHK flat. The standard of living in Bangalore has
increased and many dual income families have evolved due to which there is
more demand for three BHK flats.

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Exhibit 2:
HOUSEHOLD INCOME AND PRODUCT PREFERENCE

1
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
15000-30000 30000-50000 50000-100000 above 100000
Household Income per month(in Rs)
Percent
1bhk 2bhk 3bhk
House hold
income per month
1bhk 2bhk 3bhk Grand total
15000-300000 5 6 8 19
300000-500000 7 6 13
500000-100000 2 6 8
Above 100000 1 9 10
Grand total 5 16 29 50
ANALYSIS AND INTERPRETATION:
From the above chart we can infer that most of the respondents falling in the
salary bracket of Rs 15000 to Rs 30000 per month prefer a two bhk and a three
bhk flat.
55% of the respondents in the salary bracket of Rs 30000 to Rs50000 per month
prefer a two bhk flat.
75% of the respondents falling in the salary bracket Rs50000 to Rs100000 per
month prefer a three bhk flat.
90% of the respondents earning more than Rs100000 per month prefer a three
bhk flat. The reasons for the respondents preferring a three bhk flat can be that

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the standard of living in Bangalore has increased and majority of people want to
live in comfort and luxury.
Exhibit 3:
GENDER AND SOLE EARNER
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
female male
Gender
Percent
no yes
Gender No Yes Grand Total
Female 16 3 19
Male 18 13 31
Grand Total 34 16 50
ANAYSIS AND INTERPRETATION:
59% of male respondents and 83% of the female respondents are not the sole
earners of the family because of the changes in the socio-economic trends. As
India and Indian consumers change rapidly, this is one churn that has already
played out in urban India. It is now that majority of the families have multiple

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incomes and it’s a rising trend. Males are no more the sole earners of the family
as opposed to the earlier era; the women of the household have also evolved and
thereby contribute to the income of the family hence dual families are becoming
popular in urban India.
Exhibit 4:
HOUSEHOLD INCOME AND AFFORDABLE BUDGET

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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
15000-30000 30000-50000 50000-100000 above 100000
Household Income per month (in Rs)
Percent
10-15lakhs 15-25lakhs 25-30lakhs above 30lakhs
House hold
Income per
Month
10-15lakhs 15-25lakhs 25-30lakhs Above
30lakhs
Grand Total
15000-30000 4 8 4 3 19
30000-50000 1 4 8 13
50000-100000 2 2 4 8
Above 100000 1 4 5 10
Grand Total 5 15 18 12 50

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40% of the respondents falling in the salary bracket of Rs 15000 to Rs 30000
prefer purchasing a house in the price range Rs 15 lakhs to 25 lakhs. This is
considered as an affordable housing budget. 61% of the respondents falling in the
salary bracket of Rs30000 to Rs 50000 prefer purchasing a house in the price
range Rs 25lakhs to 30 lakhs which they consider as an affordable budget. 50%
of the respondents falling in the salary bracket of Rs 50000 to Rs 100000 prefer
purchasing a house in the price range of above Rs 30lakhs which they consider as
an affordable budget.
50% of the respondents earning above Rs100000 prefer purchasing a house in the
price range of above Rs30lakhs which they consider as an affordable budget.
From the above data we can infer that as the household income of the
respondent’s increases, the purchasing power also increases and hence their
affordability range also increases.

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Exhibit 5:
HOUSEHOLD INCOME AND AREA PREFERENCE
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
15000-30000 30000-50000 50000-100000 above 100000
Percent
heart of city peripheral area suburban area
House hold
Income per
Month
heart of
city
peripheral
area
suburban
area Grand Total
15000-30000 8 1 10 19
30000-50000 2 3 8 13
50000-100000 3 1 4 8
above 100000 4 2 4 10
Grand Total 17 7 26 50

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55% of the respondents falling in the salary bracket of Rs 15000 to Rs30000
prefer purchasing a house in the sub-urban areas.
40% of the respondents earning a salary above Rs100000 prefer purchasing a
house in the sub-urban areas and heart of the city. From the above data we can
infer that majority of the respondents prefer purchasing a house in the sub-urban
areas. This is because there is an increasing demand of residential property at
these areas which are free from traffic congestions, have good physical and
social infrastructure, connectivity and availability of premium apartments.
Exhibit 6:
HOUSEHOLD INCOME AND PLANNING TO PURCHASE

1
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
15000-30000 30000-50000 50000-100000 above 100000
Percent
no yes
House hold
Income per
Month No Yes
Grand
Total
15000-30000 8 11 19
30000-50000 5 8 13
50000-100000 2 6 8
above 100000 2 8 10
58% of the respondents falling in the salary bracket of Rs15000 to Rs30000 are
looking to purchase a primary residence in the next years.

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80% of the respondents earning a salary above Rs100000 are looking to purchase
a primary residence in the next two years.
Majority of the respondents are looking to purchase a property in Bangalore
because the city has undergone a massive revamp ever since the software boom
hit India and also because of the favourable climatic conditions in the city.
Buying a property in Bangalore now, is an attractive option for all the customers
looking for houses.
Exhibit 7:
PURPOSE OF PURCHASE AND PLANNING TO PURCHASE
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
no yes
Planning to purchase property
Percent
current living space future abode good investment option
Purpose no yes
Grand
Total

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current living space 4 6 10
Future abode 7 9 16
good investment option 6 18 24
For 55% of the respondents planning to purchase a property in the next two years
the primary reason for purchase is good investment option.
the primary reason for purchase is future abode.
the primary reason for purchase is current living space.
Therefore, we can infer that for majority of the respondents the primary reason
for purchasing a property is that they consider it as a good investment option.
This is because owing an asset is considered valuable in this time of economic
meltdown.
Exhibit 8:
HOUSEHOLD INCOME AND SELLER PREFERENCE

1
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
15000-30000 30000-50000 50000-100000 above 100000
Household Income per month (in Rs)
Percent
either of above government bodies private developers
House hold Income per
month either of above
government
bodies
private
developers
Grand
Total
15000-30000 6 13 19
30000-50000 3 1 9 13
50000-100000 1 1 6 8
above 100000 2 8 10
Grand Total 12 2 36 50
70% of the respondents within the salary bracket of Rs15000 to Rs 30000 prefer
purchasing property from private developers.
70% of the respondents within the salary bracket of Rs 30000 to Rs50000 prefer

1
75% respondents within the salary bracket of Rs 50000 to Rs 100000 prefer
80% of the respondents earning a salary above Rs 100000 prefer purchasing
property from private developers.
Majority of the respondents prefer buying property from private developers
though they cost more than government bodies. This is due to the fact that they
are unsure of the allotment made by the government because the supply is too
less compared to the demand.
The main concern for the customers is that they must be offered a reasonably
priced property with quality attached to the same and backed by required legal
documents.
Exhibit 9:
HOUSEHOLD INCOME AND MODE OF FINANCE

1
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
15000-30000 30000-50000 50000-100000 above 100000
Percent
Avail a Loan Both loan and self- finance Both loan and self-finance Self-finance
House hold
Income per
month
Avail a
Loan
Both loan and
self- finance
Both loan and
self-finance Self-finance
Grand
Total
15000-
30000 4 2 5 8 19
30000-
50000 9 4 13
50000-
100000 2 1 5 8
above
100000 2 2 6 10
Grand Total 15 5 16 14 50
41% of the respondents between the salary brackets of Rs 15000-Rs 30000 per
month prefer purchasing a property through self-finance.

1
70% of the respondents between the salary bracket of Rs 30000-Rs50000 per
month prefer purchasing a property by availing a loan.
61% of the respondents between the salary brackets of Rs50000- Rs 100000 per
month prefer purchasing property through both loan and self finance.
60% of the respondents earning above Rs100000 per month prefer purchasing
property through self- finance.
Hence we can see that respondents earning higher incomes prefer purchasing a
property by paying from their own pockets rather than availing a loan.
The bank home loans provide a high rate of interest because of which the
customers prefer self-financing as it is less risky.
Exhibit 10:
SOURCE OF INFORMATION AND PLANNING TO PURCHASE A
PROPERTY

1
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
brokers friends and family newspaper website
Source of Information
Percent
no yes
Source of Info no yes
Grand
Total
Brokers 4 4 8
friends and family 5 15 20
Newspaper 7 10 17
Website 1 4 5
50% of the respondents planning to purchase a property in the next two years
prefer to look for information through brokers.

1
prefer to look for information through friends and family.
prefer to look for information through newspapers.
prefer to look for information through websites.
Hence we can infer that majority of the respondents prefer to consult their friends
and family when purchasing a property because of their personal experience and
knowledge and also the respondents prefer to get maximum information about
properties from the websites.
Exhibit 11:
PRIORITY WHEN PURCHASING A PROPERTY
23%
19%
14%
31%
13%
A B C D E
Priority Priority 1 Priority 2 Priority 3 Priority 4 Priority 5 Grand
total
A 17 15 12 2 4 50
B 15 15 5 9 6 50
A Location
B Cost
C
Proximity to amenities like school, hospitals, transport service etc..
D Amenities in the building like gym, pool, clubs etc..
E Builder/ developers reputation

1
C 8 8 12 14 8 50
D 3 4 14 16 13 50
E 7 8 7 9 19 50
Grand
total
50 50 50 50 50
For 31% of the respondents location is the topmost priority when purchasing a
property.
For 23% of the respondents cost is the topmost priority when purchasing a
property.
For 19% of the respondents proximity to amenities like school, hospitals,
transport services etc is the topmost priority.
For 14% of the respondents’ amenities in the buildings like gym, pool, clubs is
the topmost priority.
For 13% of the respondents builder’s/ developer’s reputation is the topmost
priority.
9. COMPETITOR INFORMATION
The competitive analysis is conducted on all the firms that have launched or are
planning to launch budget housing in Bangalore.
The analysis includes finding information and details about the firms regarding
the following:
• Developer Website
• Project Name
• Project Website

1
• Launch Date
• Land Size
• Total Apartments
• Lowest all inclusive apartment price
• Highest all inclusive apartment price
• Smallest Apartment
• Biggest Apartment
• Location
• Amenities
• Balconies
• Plans- Available
• Main door
• Living Area Flooring
• Bedroom Flooring
• Kitchen Counter
• Kitchen Flooring
• Window
• Bathroom Flooring
• Bathroom Tiling
• Electrical Switches
• Internal Wall paints
• Sales
• No of apartments available
• Primary Bank

1
The different companies considered for analysis are:
1. Ozone Group
2. Reddy Structures Private Limited
3. Golden Gate Properties
4. Confident Group
5. Paras Group
6. Janapriya
7. Purvankara
8. Bindu Promoters
9. Arun Shelters
10. Innovative Constructions
11. Acas Cresent Square
12. Surya Shine Builders and Developers
13. Gaana Builders and Developers
14. Definer Ventures
The details were collected by studying the firm’s websites and by personally
calling some of the developers.
The details of the companies are as follows:

1
1. OZONE GROUP
Developer website www.ozonegroup.com
Project Name Evergreens
Project Website www.ozonegroup.com
Launch Date 23.01.09
Land Size 10 acres
Total apartments 900
Lowest all inclusive Apartment Price26 Lakhs
Highest all inclusive Apartment Price36 Lakhs
Smallest apt.( no of bdr) 2
Biggest apt.( no of bdr) 3
Location Off Sarjapur road, Bangalore.
Amenities Pool, Gymnasium, Open air theatre, Power back up
Jacuzzi, Indoor games, Meditation centre etc..
Balconies Not available
Main door Designer door shutters
Living Area Flooring Vitrified/ceramic tiles
Bedroom Flooring Vitrified/ceramic tiles
Kitchen Counter Granite counter, stainless steel sink
Kitchen Flooring Vitrified/ceramic tiles
Window Powder coated aluminium
Bathroom Flooring Anti-skid ceramic tiles
Bathroom tiling Glazed ceramic dado tiles
Electrical Switches Elegant modular electrical switches
Internal Wall Paint Oil bound distemper/ emulsion paint
2. REDDY STRUCTURES PRIVATE LTD.
Developer website www.mahaveergroup.in
Project Name Mahaveer Rich
Project Website www.mahaveergroup.in
Land Size 2 acres, 11 guntas
Lowest all inclusive Apartment Price 19 Lakhs

1
Highest all inclusive Apartment Price 28.5 Lakhs
Location Hesaragatta road, Off Tumkar road,
Bangalore.
Amenities Pool, gymnasium, indoor games, power
back up, children’s area etc.
Main door Teak wood frame ad OST shutters
Living Area Flooring Vitrified tiles
Bedroom Flooring Vitrified tiles
Kitchen Counter Granite counter, stainless steel sink/
granite sink.
Kitchen Flooring Vitrified tiles
Window Aluminium powder coated windows
Bathroom Flooring Vitrified tiles
Bathroom tiling glazed ceramic dado tiles
Internal Wall Paint Oil bound distemper
Sales Good
No of apartments available 120/220
Primary Bank Indian Bank, HDFC

1
3. GOLDEN GATE PROPERTIES
3. CONFIDENT GROUP
Developer website www.confident-group.com
Project Name Confident Atik
Project Website www.confident-group.com
Launch Date February 2009
Land Size 5 acres
Developer website www.ggproperties.com
Project Name Commune
Project Website www.thecommune.in
Land Size 30 acres
Lowest all inclusive Apartment Price 18 lakhs + registration
Highest all inclusive Apartment Price 22 lakhs + registration
Location Banshankari 6th phase, Bangalore
Amenities Restaurant, club houses. amphitheatre,
health club.
Balconies Available
Plans- Available Master plans & floor plans
Main door Flush shutter with one side polished
teak veneer
Window Two track aluminium or powder
coated
Bathroom tiling Glazed ceramic dado tiles
Internal Wall Paint Oil bound distemper with putty

1
Total apartments 60-80
Lowest all inclusive Apartment Price 20 lakhs + registration
Highest all inclusive Apartment Price 25 lakhs + registration
Location Sarjapur road, Bangalore
Amenities Gymnasium, pool, tennis court, jogging
track etc.
Balconies Available
Plans- Available Master plans & floor plans
4. PARAS GROUP
Developer website www.parasgroup.in
Project Name Paras Mallige
Project Website www.parasgroup.in
Land Size 2 acres
Total apartments 72
Lowest all inclusive Apartment
Price
18 lakhs + registration
Highest all inclusive Apartment
Price
25 lakhs + registration
Location Anantha Nagar, Bangalore
Amenities Club house, swimming pool. health club.
Balconies Available
Plans- Available Master plan
Sales Very good
Primary Bank SB of Indore, Jaipur & Bikaner

1
6. JANAPRIYA
Developer website www.janapriya.com
Project Name Greenwood
Project Website www.janapriya.com
Launch Date October 2008
Land Size 7 acres
Lowest all inclusive Apartment Price16.5 lakhs
Highest all inclusive Apartment Price24.7 lakhs
Location Somashetty halli, Bangalore
Amenities Gymnasium, pool, badminton courts,
basket ball courts, kids play area.
Balconies Available, 1 balcony for 2 bedroom and
2 for 3 bedroom
Plans- Available Layout and floor plans
Main door Membrane door shutter
Window Glazed shutters and safety grill
Bathroom tiling Glazed tiles
Electrical Switches Modular switches
Internal Wall Paint Luppam with OBD paint
Sales Average
Primary Bank HDFC
7. PURVANKARA
Developer website www.puravankara.com
Project Name Cosmo
Project Website www.puravankara.com
Land Size 31 acres

1
Lowest all inclusive Apartment Price 14.33 Lakhs + Registration
Highest all inclusive Apartment Price 17.9 Lakhs + Registration
Location Behind Sipcot IT park, Pudupakkam.
Balconies No balconies
Plans- Available Site and floor plan
Sales Very good
No of apartments available 420/540, 540 in 1st phase
Primary Bank HDFC
8. BINDU PROMOTERS
Developer website www.bindu-promoters.com
Project Name Amulya
Project Website www.bindu-promoters.com
Launch Date January 2008
Land Size 2 acres
Lowest all inclusive Apartment Price 27 lakhs + Registration
Highest all inclusive Apartment Price 35 lakhs + Registration
Location Bel layout, Magadi main road, Bangalore.
Amenities Gymnasium, health club, Jain temple,
Ganesh temple, swimming pool.
Balconies Available
Plans- Available http://www.bindu-
promoters.com/presentation.html
Main door Teak wood door frame with OST shutters

1
Window Anodized aluminium sliding windows
with glass and safety grills
Bathroom Flooring Ceramic tiles
Bathroom tiling Glazed/ceramic
Electrical Switches Designer modular switches and min
circuit breakers.
Internal Wall Paint Acrlic OBD
Sales Average
No of apartments available BEL is taking 180-200 flats out of the
280
Primary Bank LIC, IDBI
9. BINDU PROMOTERS
Developer website www.bindu-promoters.com
Project Name Ananya
Project Website www.bindu-promoters.com
Launch Date May 2008
Land Size 1 and 1/2 acres
Lowest all inclusive Apartment Price 25 lakhs + Registration
Highest all inclusive Apartment Price 31 lakhs + Registration
Location Hesargatta road, Off Tumkur road,
Bangalore
Amenities Gymnasium, health club, Jain temple,
Ganesh temple, swimming pool
Balconies Available
Plans- Available http://www.bindu-
promoters.com/presentation1.html
Main door teak wood door frame with OST
shutters

1
Window Anodized aluminium sliding windows
with glass and safety grills
Bathroom tiling Glazed/ceramic
Electrical Switches Designer modular switches and min
circuit breakers
Internal Wall Paint Acrylic OBD
Sales Good
No of apartments available 1st block 50/140, 2nd block yet to
start bookings
Primary Bank LIC, IDBI
10. ARUN SHELTERS
Developer website www.arunshelters.com
Project Name MS Palazzo
Project Website www.arunshelters.com
Launch Date Ready to Occupy
Land Size 2 acres
Lowest all inclusive Apartment Price 45 lakhs
Highest all inclusive Apartment Price 58 lakhs
Location Behind Jakkur flying club, Yellankha.
Amenities Pool, gymnasium, indoor games,
library,
party hall.
Balconies Available
Plans- Available Master and floor plans available
Main door Teak flush door

1
Window Aluminium powder coated sliding
Window
Bathroom tiling Ceramic tiles dadoing
Electrical Switches Modular switches of anchor or
equivalent
Internal Wall Paint Acrylic emulsion for walls
11. INNOVATIVE CONSTRUCTIONS
Developer website www.innovativecontructions.in
Project Name Innovative Flora
Project Website www.innovativecontructions.in
Land Size 1 acre
Total apartments 76
Location Cox Town, Near Bangalore east
railway station.
Amenities Jogging track, party hall, gym, kids play
area, power back up.
Balconies Available
Main door BST shutters
Window Glass panels
Bathroom Flooring Anti-skid flooring
Electrical Switches Anchor switches
Internal Wall Paint Asian/tractor OBD paints
Sales Very good
Primary Bank LIC, Axis

1
12. SURYA SHINE BUILDERS AND DEVELOPERS
Project Name Surya Woods
Launch Date November 2008
Land Size 7 1/2 acres
Total apartments 33
Lowest all inclusive Apartment Price 8.5 lakhs
Highest all inclusive Apartment Price 10.5 lakhs
Location Near Sarla Birla International school,
31/2 kms from Banergetta circle.
Amenities Pool, club house, children's area, power
back up.
Balconies No balconies
Sales Very good
Primary Bank Karur Vysya
13.GAANA BUILDERS AND DEVELOPERS
Project Name Gaana Riddi
Launch Date November 2008
Land Size 2 acres
Location Adjacent to Bangalore University.
Amenities Gymnasium, play area, club house,
power back up.
Balconies Available
Plans- Available Floor and layout available
Sales Good
Primary Bank SBI
14.DEFINER VENTURES

1
Developer website www.definer.in
Project Name Definer Serene Drive
Project Website www.definer.in
Land Size 2 acres
Lowest all inclusive Apartment Price 18.5 lakhs
Location Between ITPL & Hoskote, 11 kms from
ITPL.
Amenities Pool, club house, gymnasium , coffee
house, department store, party hall etc.
Balconies Available
Plans- Available Floor plans available
Main door OST shutter
Bedroom Flooring ceramic tiles
Kitchen Counter Granite counter, stainless steel sink on
request.
Kitchen Flooring Ceramic tiles
Window Aluminium sliding windows with plain
Glass
Electrical Switches Modular switches of Anchor
Internal Wall Paint OBD
Sales Good
Primary Bank SBI, Axis

1
10. AFFORDABILITY IN BANGALORE
10.1 INTRODUCTION
Land prices, government subsidies, construction costs and improved efficacies
such as approvals can impact the base price per square foot of a housing unit. A
developer’s margin is another component that is added to the base price to arrive
at the selling price of a dwelling unit. Each of these parameters is in direct
correlation with the affordability of a house. The land prices constitute close to
50% to 60% of the selling price of an apartment depending on the location of the
project.
10.2 BANGALORE AFFORDABILITY QUOTIENT
For the purpose of the study two different scenarios were highlighted to
recognise how various factors such as salary levels, house prices, home loan rates

1
and unit sizes can impact the affordability quotient in Bangalore. These are some
of the assumptions for the affordability quotient analysis:
• Majority of home purchasers in Bangalore are IT/ITES employees;
• Majority of home purchasers in Bangalore will either earn individual
annual salary of INR 3–6 lakhs or a combined household salary of INR 8–
10 lakhs;
• The disposable income available to pay the home loan EMI has been
calculated after deducting taxes, basic household expenses and investment
of up to INR 100,000 from the monthly salary;
• The home-loan interest rate has been assumed at 11.5% for a 20-year loan
tenure;
HOME BUYER’S AFFORDABILITY QUOTIENT ANALYSIS
Case 1: Base case calculating affordability quotient in today’s scenario
UNIT SIZES: One BHK Size is 700 square feet
Two BHK Size is 1000 square feet
Three BHK Size is 1500 square feet
BHK- Bathroom, Hall and Kitchen
ASSUMPTIONS:
• Grocery 24%; Investment19%; Taxes 10-30%; Miscellaneous
expenses 5-10%. All unit sizes are in sq ft and prices are in INR

1
• As the income increases, the monthly disposable income also increases
and percentage of Monthly Maximum Disposable Income after taxes and basic
household expenses also increases.
EQUATED MONTHLY INSTALLMENTS
EMI = [(p*r) (1+r)^n] / [ ((1+r)^n) - 1]
p = principal (amount of loan), r = rate of interest per instalment period, i.e., if
interest is 12% p.a. r = 1, n = no. of instalments in the tenure, ^ denotes whole to
the power.
r = 11.50/12= 1%
n = 20 years *12= 240
TABLE 1: TABLE SHOWING HOME BUYER’S AFFORDABILITY
QUOTIENT ANALYSIS
Case 1: Base case calculating affordability quotient in today’s scenario

1
INFERENCES:
Annual salary 3,00,0004,00,0005,00,000 6,00,000 7,00,000 8,00,0009,00,000 10,00,000
Monthly Gross salary25,000 33,333 41,667 50,000 58,333 66,667 75,000 83,333
*Monthly Maximum
Disposable Income
after taxes and basic
household expenses 5750 9333.2413750.1 18000 24499.8 28666.8 36000 41666.5
Max EMI
Affordability 5700 9300 13500 17000 23000 28000 36000 41000
Max loan eligibility
@11.5%int rate for a
20
year loan plan 540000 950000 1350000 1700000 2340000 28000003700000 4200000
EMI for the loan
amount mentioned
above 5225 9191 13061 16450 22640 27090 35798 40636
Size of a typical three-
BHK 1500 1500 1500 1500 1500 1500 1500 1500
Affordable price of a
house per square feet360 633.333900 1133.33 1560 1866.66 2466.7 2800
Size of a typical two-
BHK 1000 1000 1000 1000 1000 1000 1000 1000
house per square feet540 950 1350 1700 2340 2800 3700 4200
Size of a typical one-
BHK 700 700 700 700 700 700 700 700
house per square feet771.428 1357.141928.57 2428.57 3342.85 4000 5285.7 6000

1
• End users of salary band INR 3-5 lakhs can afford a one-BHK house up to
INR 1,929 per sq ft.
• End users of salary band INR 6-8 lakhs can afford a two-BHK house up to
INR 2,800 per sq ft.
• End users of salary band INR > 8 lakhs can afford a three-BHK house up
to
• INR 2,800 per sq ft.
EXHIBIT 12

1
Affordable Price for a typial One BHK House
0
1000
2000
3000
4000
5000
6000
7000
3,00,000
4,00,000
5,00,000
6,00,000
7,00,000
8,00,000
9,00,00010,00,000
Annual Salary ( Rs)
Affordableprice(Rs)
Size of a typical one-BHK
Affordable price of a house
per square feet
INTERPRETATION:
From the above diagram one can infer that for a typical one BHK House whose
size is 700 square feet the affordable price of a house per square feet is :
Rs 771 for a person earning an annual salary of Rs. 3, 00,000
Rs 1357 for a person earning an annual salary of Rs.4, 00,000
Rs 1928 for a person earning an annual salary of Rs 5, 00,000
EXHIBIT 13

1
Affordable price for a typical two BHK House
0
1000
2000
3000
4000
5000
3,00,000
4,00,000
5,00,000
6,00,000
7,00,000
8,00,000
9,00,00010,00,000
Annual Salary (Rs)
Affordableprice(Rs)
Size of a typical two-BHK
Affordable price of a house per
square feet
INTERPRETATION:
From the above diagram one can infer that for a typical two BHK House whose
EXHIBIT 14

1
Affordable price for a typical Three BHK House
0
500
1000
1500
2000
2500
3000
3,00,000
4,00,000
5,00,000
6,00,000
7,00,000
8,00,000
9,00,00010,00,000
Annual Salary ( Rs)
Affordableprice(Rs)
Size of a typical three-BHK
Affordable price of a house per
square feet
INTERPRETATION:
From the above diagram one can infer that for a typical three BHK House whose
Case 2: Calculating the affordability quotient after reducing the unit sizes

1
ASSUMPTIONS:
• Grocery 24%; Investment19%; Taxes 10-30%; Miscellaneous expenses 5-
10%. All unit sizes are in sq ft and prices are in INR
• As the income increases, the monthly disposable income also increases and
percentage of Monthly Maximum Disposable Income after taxes and basic
household expenses also increases.
EQUATED MONTHLY INSTALLMENTS
EMI = [(p*r) (1+r)^n] / [ (1+r)^n) - 1]
p = principal (amount of loan), r = rate of interest per instalment period, i.e., if
interest is 12% p.a. r = 1, n = no. of instalments in the tenure, ^ denotes whole to
the power.
r = 11.50/12= 1%
n = 20 years *12= 240

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