Pictures

Above: Near completion projects in Virar East
(we did not approve these, there is hardly any space between two buildings and there are new buildings coming up right in front)

Below are a few pictures from TMCity -
(A complete (mock) building and an overview of the current construction status)

Update on Builders

I think now be a good time to give everyone an update on where things stand today as MHFC gets ready to launch.

For starters, since we are project led, the most important update is on the builder/project front.

TM City:
Our team visited TMCity two weeks back and was really impressed by their progress. The last time I went there they barely had one mock building up (This was only 4-5 months back). Now almost 54 buildings are completed at foundation level and about 5-6 till the first floor. They are confident of completing about 3000 flats by the end of August and a 1000 more by December

Nirman Realty:
We recently met the promoters of the Nirman group. They are building about 228 flats in Neral (near Karjat, where TMCity is located). They also have land banks in western and central areas of Mumbai and showed great enthusiasm in partnering with us. The meeting reinforced our belief that the main cause of lack of housing is not really a lack of developers, but it is the lack of financiers for the end-buyers. Once the builder is assured of the take out funding, in today's market, he is more than willing to put up mass low-cost housing projects.

Virar / Nalasopara:
When we had gone last time to take a look at some of the near-ready properties, frankly we were quite disappointed with the lack of planning (inefficient use of FSI) and poor quality of construction. We realized that MHFC will have to be involved from an earlier stage in a project to ensure decent floor plans and good quality of construction. Our mission is to improve the quality of life of the urban poor - not lift them from a slum to put them back in a concrete slum. We have identified a couple of builders in the area and are in talks with them to be the almost the exclusive financier to the whole project. That will give us enough leverage to ensure a decent finished product.

Ahmedabad:
There is positive news from Ahmedabad too - the two builders we were talking to have got their environmental clearances and are set to start their projects in April/May. We are planning to go visit the sites again next week - more update on that will follow.

Overall, all the builders seem to be realizing this is a recession proof business and are willing to work on lower margins and higher volumes.

TM City: Loan mela visit

A couple of months back I had been invited for the loan mela organized by TM City (http://www.tmcity.in/) They had invited everyone who had been allotted a flat (through the lottery process) and a few housing finance companies (hfc) so that the customers could explore available financing options under one roof. Though we were not ready to start operations, I wanted to talk to prospective customers and other hfc's to get a better understanding of what they thought of the project. TM City employees were very helpful and gave me a desk next to other hfc's.

I think the mela was a big success, quite a few people had come with necessary documents and were sanctioned loans on the spot. It was very useful for me - I got to meet various categories of customers. One slightly worrying factor was that a decent chunk was looking at the house in karjat as an investment - or a house in the future when their kids grow up, so not as a primary residence. Their main argument was the lack of schools and other general infrastructure. Interestingly, the long commute into the city was not bothering them as much. A few were just looking for financing only because they got selected in lottery. Some already asked about selling them onto others and get the appreciation, though there were quite a few who were genuinely willing to move to Karjat and commute to Navi Mumbai or Mumbai city. Almost everyone who got allotted the 3 lakh house were in the 10k household income range with most of the income in cash. (and other hfc's rejected them because of that - eg. wife taking tuitions at home earning 6000 a month, or private employers giving 1/2 cheque and 1/2 cash)

On the whole, I had a good q/a session with them. But my interpretation - for people this seems like a subsidised project, and think that market price of such a product will be higher - so quite a few speculative investors!