Founded and incorporated in 2008, VBHC (formerly known as Value and Budget Housing Corporation Private Limited), is a journey of two bankers who came together for one objective – providing budget homes. Before even ‘Housing for All by 2022’ mission took the nation by storm, Mr Jerry Rao and Mr P. S. Jayakumar believed that quality living should be within everyone’s reach and grasp.
While the many affordable projects in Bengaluru, Mumbai, NCR, and Chennai are a testimony to their success, VBHC plans to expand its footprint across India.
Mr Narasimha Swamy N, Head of Sales & Marketing of VBHC spoke to Nikunj Joshi of RoofandFloor Bureau and shared insights about the company’s expansion plan and the growth of affordable housing in India.
Here are excerpts from the discussion.
How is VBHC doing in the current scenario?
With the central government taking multiple initiatives, affordable housing has become the talk of the town. Since our vision, as a company, is to provide budget homes to people, our business is doing really well.
Post demonetisation, the market was under pressure for some time as people were trying to understand the situation. But now the so-called ill-effects of the surgical strike is fading gradually.
Moreover, budget homes are value homes. In terms of sales, this festive season garnered a lot of momentum. Between Sept-Oct, we got the best numbers in the last 12-15 months.
Were you prepared for RERA?
First and foremost, I must say, RERA is a blessing for us. With the introduction of RERA and GST, we are getting an equal opportunity in the industry. Now, all developers are on one platform. As far as readiness is concerned, we were ready since the inception.
We’ve always maintained separate accounts for different projects. Since most of our buyers opt for a home loan, our transactions have been transparent.
All VBHC projects are now RERA-approved, except the ones where the Occupancy Certificate has been received.
What are your views on Housing for All by 2022?
A great initiative by the Indian government. But I would like to add here that before even this mission was announced, Mr Jerry Rao had the same vision way back in 2008. He deserves some credit (chuckles).
The recent policy initiatives by the Central government are remarkable. It is good to see that some serious action is being now taken to promote the growth of the affordable segment.
The government is working in the right direction in terms of achieving the ambitious mission of Housing for All by 2022. However, every steep target has its constraints. We might not achieve complete success in terms of target, but the housing shortage gap will definitely reduce.
Further, with affordable housing getting infrastructure status, a lot of players in the industry are now venturing into this segment. These changes are good for the industry.
What are some of the best developments in the real estate sector that has or will boost the affordable segment?
For consumers, out of all the recent reforms, the Credit-Linked Subsidy Scheme (CLSS) has been the showstopper. The subsidy extended to higher income brackets is helping genuine buyers to achieve their home buying dreams.
Moreover, availing home loan for people in the unorganised sector (like drivers, factory workers, etc.) was not very easy in the past. Now, with benefits to LIG and MIG, even this segment is coming forward and showing interest in property buying.
For developers in the affordable segment, revision of the carpet area definition and infrastructure status has helped significantly. Also, as we get GST input credit, it is easier for us to maintain affordable pricing.
From an unorganised sector, we have embarked on a journey to become an organised industry.
Who is your target audience?
Majorly, the lower-middle and mid-segment families who are into blue-collared jobs. Recently, we’ve also seen interest from young IT professionals.
To be precise, anybody who cannot afford anything above Rs 25Lakh.
As per you, what more needs to be done to promote affordable housing in the country?
Well, streamlining approval process is the first and most crucial thing that needs to be done. Apart from this, schemes like CLSS should be promoted more aggressively. Lending institutions, developers, and the government should come together and promote these schemes so that it reaches the right audience at the right time.
Tell us something about your expansion plans.
VBHC is present in Bangalore, Chennai, Mumbai and NCR. Our focus cities, at present, is Bangalore and Mumbai.
We would love to explore the premium segment, provided we get the right opportunity at the right time. But that doesn’t change our vision of providing value homes to buyers.
Developers often complain about low profit margin in the affordable segment. How are you able to manage well?
With land and construction costs rising, we work on low margins.
However, since VBHC applies contemporary building technology, computer-aided design methods, a lean manufacturing process, and ingenious industrial engineering processes, we are able to sustain well.
Your outlook for real estate in 2018?
The year 2017 saw several breakthrough reforms. Now consumers and businesses are aligning themselves to those reforms. The next big talk is about Land Clearances.
From the second quarter onwards in 2018, we might see an uptick in the sales volume.
While affordable housing is, undoubtedly, the future, we may also see a revival in other segments. Lastly, it will be a typical end-user market next year as well.
Wishlist for 2018
- Single-window clearance
- Aggressive promotion of government schemes
- Extension of validity of CLSS-MIG scheme (the present deadline is December 31, 2017).
