A bit of history

Sentiments in the real estate market changed around mid-January 2008, when the Sensex crashed. Real estate prices started going down and so did sales volume.

Says Pranay Vakil, chairman, Knight Frank India, a real estate consultancy, "There was a huge fall in transactions."

By mid-2008, sales fell to almost 10 per cent of what they were in 2007. Volumes did not pick up even during the Diwali season, the period when offtake increases.

On the one hand, sales touched abysmally low levels, on the other, private equity funds became cautious about lending to developers.

"It was like a noose tightening around their neck," says Vakil. The only way out for developers was to come up with innovative ways to woo customers and do some introspection at the strategy level.

At that time, most developers catered only to luxury housing. "In places like Mumbai, there was no availability of 1-bedroom apartments," says Vakil.

Around the same time, two government initiatives in Mumbai and Delhi, offering houses through Maharashtra Housing and Area Development Authority (MHADA) and Delhi Development Authority (DDA), respectively, at a substantial discount to the market rate, generated huge response.

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