Construction technology for affordable housing is a challenge. We need rapid construction technologies at traditional construction prices, given the current market situation.

 The Poddar Group is focusing on the value housing segments in Mumbai, within the MMRDA region. It aims to actively expand into other markets in the near future. Rohit Poddar gives an edge to big players as they are likely to get benefitted more with new smart city projects offered by government.

Advantage big players
A marked improvement in business sentiment has been observed since Narendra Modi became PM, in addition to an almost 50 per cent increase in the BSE stock market indices. The GDP has grown at 5.7 per cent in Q1 of this financial year and WPI was reported at sub 4 per cent. However, this euphoria is yet to translate into significantly higher absorption rates across all major markets in India.

There remains large unsold inventory in the luxury space across all metros and in Mumbai there is an estimated 4 years of stock. According to Mr Poddar, “The only area where there is buoyancy is in the affordable housing space, and this is due to shortage of this format. And even in this space, customers prefer integrated townships which mean large investments into projects and hence projects from the big industry players are doing well.”

He adds, “The housing market should take 3-4 additional quarters to show significant signs of recovery, even though the worst is definitely behind us and growth in the economy has resumed.”

100 smart cities: nice opportunity
It is certainly an interesting opportunity, which I hope and expect will be executed well by the present government. There is a tremendous requirement to decongest Metros’ centres with increasing levels of urbanisation and these smart cities will go a long way in achieving this goal.

Reasonable costs
The prices of the plethora of materials required in the housing industry have been reasonable over the last year. The labour costs have also been stable. Mr Poddar adds, “As developers we would always like a scenario where all input costs are stable and at the same time the selling prices of the inventory is rapidly increasing.”

Affordable housing: a challenge
“Construction technology for affordable housing is a challenge. We need rapid construction technologies at traditional construction prices, given the current market situation,” suggests Mr Poddar. A rapid increase in labour rates is expected in the foreseeable future where there will be a compression in the difference of costs between the same. Additionally the use of green building materials and solutions at affordable prices will become more and more relevant.

Spend management being a critical aspect
Poddar Developers, with its plenty of experience in the area, has traditionally manufactured several commodities such as steel, textiles, tyres over several decades. It has used the same ERP solutions in its construction and development business. The company considers spend management as a very important area for it in affordable housing as project management and cost management determine its profitability.

– Rohit Poddar,
Managing Director, Poddar Developers