Bangalore Development Authority’s (BDA) venture to allot 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 the city.

Infrastructure expert Dr Ashwin Mahesh
said, “As the BDA and the KHB acquire land at a lower price, the 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.
Their (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.”

Low-cost units at half the cost?

Housing
consultant Prashanth Sambargi said, “According to the advertisement
issued by the BDA, it is planning to allot three-bedroom houses at `23
lakh and `27 lakh, whereas private developers charge at least `50 lakh
for a three-bedroom house in the city. 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.”

Sambargi 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, he
said.

Houses to benefit people, says BDA

BDA
Commissioner T Sham Bhatt, said, “If we are providing housing units at
lower prices we should be happy about it as it will benefit the people.”

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.