As alluded in my topic post there is a lot of talk on AH. Developers have still yet to fully put their weight behind this govt objective because even with all the sops its still not stacking up financially for them.
An extract from the recent Oberoi con call
Another extract - from a the recent ahluwalia contracts concall
And kolte-patil is “still” evaluating AH ( from god knows when )
There are several such indicators if you go through the transcripts, AR’s, interviews etc
To understand the roots of all this the 2013 report of KPMG/NAREDCO is particularly useful.
In the opening paragraph itself they acknowledge the need for low cost and innovative technologies
This is followed by a striking insight which is at the operational level is a big big barrier - "Pricing of affordable housing is primarily driven by the cost of construction & not land"
The obvious conclusion is that there needs to be a major shift in the construction technology used by developers as opposed to the standard RCC based techniques. However, this is easier said than done as there is a neat ecosystem around RCC based techniques which is not going to go away in a hurry as the entire value chain will have to unlearning and relearn new skills. However the report does give an indication about where the future may lie ( PreFab & Precast) and in my opinion herein lies the opportunity.
To be sure, construction technology that builds home faster and cheaper is feasible ONLY if the slab cycle matches the sales cycle. There is no point in building faster if the sales are slower. However the flip is that if sales are faster ( as will probably be the case with cheaper costing homes ), the maximum profit for developers will be in building faster
Best
Bheeshma