More Supply

When we started MHFC a year ago, it was very difficult to find any projects catering to our segment (approx price point Rs 5 lakhs and size of flat about 350 sq ft). But it seems that the slowdown in the economy (and the lack of demand in luxury / higher price homes) has been positive for us. The response for the TMC project (initial allotment of 2000 flats received about 66,000 applications) and of course the overwhelming demand for MHADA allotments (about 750,000 applications for less than 4,000 flats) has also probably been inspiring for other builders to enter the fray. In the last month we have seen a little bit of a spurt in announcements. Other than the Virar project in which we are participating, (a) we have visited a site of 100 acres in Ambivali where Neptune Builders plans to build 10,000 affordable homes - in the first phase, 815 flats were offered (of which about 200 will be Rs 4.73 lakhs) and sold out. Based on this response, Neptune plans to announce bookings for the second phase in May (b) we visited another site in Nalasopara where Vini Builders plans to build a "township" of 475 flats - of which a proportion will be sold for 6.55 lakhs - slightly above our range but at least some builders are moving the price line down to our segment's requirements.
In addition to the above, we have received calls (one as far away as Erode, Tamil Nadu) from builders interested in developing specific projects - hopefully this will continue (even when the market improves for other segments) as increase of supply is absolutely crucial.

Application form...

... is ready.

Application form

Currently only accepting applications for two approved projects:
- Vaishnavi Constructions (Virar East)
- TM City (Karjat) - http://www.tmcity.in/

More projects are in the pipeline and will be posted soon on the website

Also ready - Survey form

New article on MHFC

A new magazine - Pluralist - focusing on social initiatives did a story on MHFC recently
http://www.mhfcindia.com/MHFC_article.pdf

Virar pics

Before I talk about the Virar project - just yesterday I was at a microfinance conference in Delhi and the chief guest was none other than the father of microfinance - Prof Muhammad Yunus. It was great to see him and hear him speak live. Simplicity and Humility personified.



Back to our project...

Key features of the project
- Four buildings almost 70-80% complete, other four at foundation stage
- Good location - close to the railway station and on a main road
- Really good quality of construction (including fancy PoP at corners on the ceiling)
- Impressive kitchen and bathroom fittings

Few pics -






Random pic (below) from the train - the Virar temple - it can be seen from all over in Virar

New Property at Virar / Drivers reaction

Last week (Friday), Ramesh (our property expert) and Nachiket went to check a property at Virar East - about 5 to 10 mins auto ride from the station - which is almost ready (about 3 of the 8 buildings are pretty much done with the rest to follow during the year). It seems that there could be about 100 flats available (of about 340 sq ft) which could cost about Rs 5.5 lakhs. This is slightly above our target price range - but having said that, when I asked some drivers to see the property - they actually wanted to buy the next higher value flat (which is priced at about 7.5 lakhs)! They were willing to put in 2.5 lakhs as margin and were quite comfortable with servicing the EMI on the 5 lakh loan required for 15 years. I asked them why they would take on this kind of additional pressure and why not just buy the smaller 340 sq ft 1 RK flat ? They all said that they had to plan for the future - for their children (extra room needed) and even for guests from the village. This showed both their aspiration levels and more importantly, affordability levels - the drivers were all earning in the region of 12,000 to 15,000 and so the EMI of approx 5,000 was not a problem.

Anyway, re loans against the property itself, MHFC is doing a soft launch - just circulating the possibility to people who have been asking us for some time about properties and loans - and it looks like we will have 100 buyers from just this personal reference list. We will be able to test our systems through this initial process - so treating this as a pilot.

Nachiket took some photos of the project itself which I am sure he will put up shortly.