Availability of BDA, KHB units will reduce demand for private developers’ flats

BDA allot 3-bedroom houses at Rs 27 lakh while private developers charge more than Rs50 lakh

Bangalore Development Authority’s (BDA) proposal for allotment of 6,190 low-cost housing
units and Karnataka Housing Board’s (KHB) initiative to construct 3,000 flats in and around
the city are likely to affect the realty sector in Bangalore.

Infrastructure experts pointed out that the BDA and the KHB acquire land at a lower price and construct houses at lower cost. The lower cost of housing units will naturally be lower and private developers cannot sell flats at the cost at which the BDA and the KHB sell their
units.

Private developers’ business is likely to be affected. It is said that the BDA’s allotments have
benefited the middlemen and speculators at the cost of farmers and private developers, and it is not likely to change this time as well. Many plots allotted by the BDA continue to remain
vacant.

Housing consultants argued that BDA’s plan to allot three-bedroom houses at Rs 23 lakh and
Rs 27 lakh, whereas private developers charge more than Rs 50 lakh for a three-bedroom
house in the city would naturally reduce the demand for private housing complexes.

Moreover, people who buy flats from government agencies can be secure as they will not
face any title disputes. Therefore, most of the people would prefer to buy flats from the BDA
even if the quality of construction would not be as good as that of private developers, they
said.

Bangalore Residential Report, published by a private realty agency, showed 20,600 housing
units were consumed in the city in 2011 and around 55,000 housing units were still available.

On an average, Bangalore consumed around 25,000 housing units annually and a majority
of them were low-cost units. If more than 9,000 units were made available in the market by
government agencies, private builders would be greatly affected.

Houses to benefit people, says BDA

Bangalore Development Authority (BDA) Commissioner T Sham Bhatt said the BDA’s low
cost houses will benefit the people of lower income in the City of Bangalore.

The BDA has invited applications for allotting 4,388 single-bedroom flats, 1,170 two-
bedroom flats and 632 three-bedroom flats at different places in the city and will issue
applications from March 25.

The BDA has reserved 2,194 single-bedroom flats from the total 4,388 units under different
categories. The KHB has proposed to construct over 3,000 low-cost housing units in
Suryanagar II Phase, Yelahanka, Devenahalli and Kengeri.