Affordable Home Sales Decline by 9% in Q1: Knight Frank Report
Despite the decline in affordable home sales, the overall housing market in major cities like Delhi-NCR and Mumbai remained stable during the first quarter of the year, according to the latest Knight Frank report.
Affordable HomesHousing MarketKnight FrankReal EstateEconomic TrendsReal Estate NewsApr 05, 2025
Despite this decline, the overall housing market remained relatively stable, with total residential sales across eight major cities—Delberg-NCR, Mumbai, Pune, Hyderabad, Chennai, Bengaluru, Kolkata, and Ahmedabad—showing a balanced trend. The report attributes this stability to a combination of factors, including government policies, interest rates, and consumer sentiment.
Affordable homes, typically defined as properties priced below INR 50 lakhs, have seen a significant reduction in demand. This can be attributed to several factors, such as rising construction costs, higher interest rates, and economic uncertainty. Developers are finding it increasingly challenging to offer homes at affordable prices, leading to a decrease in the number of units sold.
However, the market for mid-to-high-end properties, priced above INR 50 lakhs, has remained robust. This segment continues to attract buyers, driven by factors such as better amenities, security, and location. The demand for larger and more luxurious homes is particularly strong in metropolitan areas like Mumbai and Delhi-NCR, where the population is wealthier and more inclined to invest in premium properties.
The government has been proactive in addressing the issues in the housing market. Initiatives such as the Pradhan Mantri Awas Yojana (PMAY) and the Real Estate (Regulation and Development) Act (RERA) have been instrumental in promoting transparency and accountability in the sector. These policies aim to make home ownership more accessible and affordable for a broader segment of the population.
Despite these efforts, the real estate market continues to face challenges. One of the primary issues is the mismatch between supply and demand. While there is a significant demand for affordable homes, the supply has not kept pace. This has led to a rise in prices, making it difficult for first-time buyers and low-income households to enter the market.
Another factor contributing to the decline in affordable home sales is the economic slowdown. The ongoing global economic uncertainties and domestic challenges have affected consumer confidence. Many potential buyers are adopting a wait-and-see approach, hesitant to make large financial commitments in a volatile market.
However, there are positive signs of recovery in the market. The government's focus on infrastructure development, particularly in Tier II and Tier III cities, is expected to boost the housing sector. Improved connectivity and amenities in these areas are likely to attract more investment and drive demand for both affordable and mid-range properties.
Moreover, the real estate sector is witnessing a shift towards technology and innovation. The adoption of smart home solutions, sustainable building practices, and digital marketing are reshaping the way homes are built and sold. This trend is likely to further enhance the appeal of residential properties and attract a wider range of buyers.
In conclusion, while the sales of affordable homes have declined, the overall housing market remains resilient. The government's continued support and the sector's adaptability to changing market conditions are key factors that will drive growth in the future. For developers and investors, it is crucial to stay attuned to these trends and adapt their strategies to meet the evolving needs of the market.
Knight Frank, a leading global real estate consultancy, provides comprehensive insights and data-driven analysis to help stakeholders navigate the complexities of the real estate market. Their reports and research are widely recognized as authoritative sources of information in the industry.
Frequently Asked Questions
What is the main reason for the decline in affordable home sales?
The main reasons for the decline in affordable home sales include rising construction costs, higher interest rates, and economic uncertainty, which have made it difficult for developers to offer homes at affordable prices.
Which cities are included in the Knight Frank report?
The Knight Frank report covers eight major cities: Delhi-NCR, Mumbai, Pune, Hyderabad, Chennai, Bengaluru, Kolkata, and Ahmedabad.
How has the government been supporting the housing market?
The government has been supporting the housing market through initiatives such as the Pradhan Mantri Awas Yojana (PMAY) and the Real Estate (Regulation and Development) Act (RERA), which aim to promote transparency and make home ownership more accessible.
What is the trend for mid-to-high-end properties?
The trend for mid-to-high-end properties, priced above INR 50 lakhs, remains robust. These properties continue to attract buyers due to better amenities, security, and location, especially in metropolitan areas like Mumbai and Delhi-NCR.
What are the positive signs for the future of the housing market?
Positive signs for the future of the housing market include the government's focus on infrastructure development, the shift towards technology and innovation in the real estate sector, and the potential for increased demand in Tier II and Tier III cities.
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