Builder in Chennai are now looking at small parcels of land to promote budget housing units in the sub -20 lakh segment. The key to this is to identify land at the right price at the right place and then there would be no room for complaints – feels the developers.

Developers doing larger projects are currently stuck with their inventory and are looking out for alternatives to sustain their business. Experienced developers who have promoted smaller housing projects know that they are the cash surplus projects as long as the plot sizes are with 2-3 acres. Many developers are now attracted by this cash flow projects.

Funds required for budget housing can be collected from the market (customer) and this should be spent only on the same project. If diversions happen, the project gets stuck and things go wrong. Hence it is important that any fund collected for a particular project is treated as a separate entity and used only for that project.

Margins in affordable housing projects segment is low and hence the number of projects need to be high to make significant profit. Realtors feel that investment climate in TamilNadu is not favourable due to the slow employment generation in the IT sector and lay offs in the manufacturing sector. Though Chennai had a good turn around after the 2008 slump realtors may now have to watch and wait cautiously before making decisions on price rise and keeping apartment sizes unwieldy.