High interest rates and an adverse sentiment notwithstanding, real estate developers say there is still a huge demand, especially for budget housing and are accordingly tailoring their strategies to cater to this segment.

"Many developers are beginning to focus on budget housing comprising of one bedroom/hall/kitchen (1 BHK). There is a high demand in this segment which has not been affected overly by the recent slowdown," Pune-based Paranjpe Schemes' Managing Director Shashank Paranjpe told PTI on Tuesday.

Demand and footfalls have not slackened; it is only the sentiment that has been affected which is keeping buyers away, Paranjpe said.

Buyers feel realty prices are on the higher side and would slide in the coming months. "Hence, they are waiting for that to happen," Sunil Mantri Realty's chairman Sunil Mantri said.

With a slowdown, especially in the higher-end housing segment, realty players would begin to focus on budget housing, he said.

"At around Rs 20-lakh (Rs 2 million), 1 BHKs are affordable. In Tier-II and III cities, these would be available for up to Rs 15-lakh (Rs 1.5 million)," he said.

Both Mantri and Paranjpe are planning to start budget housing projects. While Mantri is planning his in Mumbai and Gwalior, Paranjpe will begin his in Pune.