Affordable Home Sales See a Dip in 2024: JLL Report Reveals
Real estate consultant JLL India's data highlights a notable decline in the sales of affordable apartments across major cities in India, including Mumbai, Delhi NCR, Bengaluru, Pune, Chennai, Hyderabad, and Kolkata.
Real EstateAffordable HomesJll IndiaProperty MarketIndiaReal Estate MumbaiJan 18, 2025
JLL India, a leading real estate consultant, has released a comprehensive report that reveals a significant decline in the sales of affordable homes in 2024.
This trend is observed across several major cities in India, including Mumbai, Delhi NCR, Bengaluru, Pune, Chennai, Hyderabad, and Kolkata.
The report provides valuable insights into the current state of the property market and the factors contributing to this decline.
Key Findings
The JLL report indicates that the sales of affordable homes, defined as apartments priced below INR 30 lakh, have dropped by 15% in 2024 compared to the previous year.
This decline is particularly pronounced in cities like Mumbai and Delhi NCR, where the real estate market has traditionally been robust.
The drop in sales can be attributed to a combination of economic and market factors, including rising interest rates, economic uncertainty, and a shift in buyer preferences.
Economic Impacts
The decline in affordable home sales has significant economic implications.
For developers, reduced sales mean lower revenue and cash flow, which can affect their ability to finance new projects and maintain existing ones.
This, in turn, can lead to a slowdown in the overall construction and real estate sector, impacting employment and economic growth.
Market Factors
Several market factors are contributing to the decline in affordable home sales.
One of the primary factors is the rise in interest rates, which has made home loans more expensive.
As a result, many potential buyers are finding it difficult to afford the monthly installments, leading to a decrease in demand.
Additionally, economic uncertainty and job instability are causing consumers to delay major purchases, including homes.
Shift in Buyer Preferences
Another significant factor is the shift in buyer preferences.
Many first-time homebuyers are now looking for smaller, more affordable units in the suburbs rather than larger apartments in the city centers.
This shift is driven by the desire for more space and a better quality of life at a lower cost.
However, developers have been slow to adapt to this change, leading to a mismatch between supply and demand.
City-wise Analysis
- Mumbai The decline in affordable home sales in Mumbai is particularly noteworthy.
The city has seen a 20% drop in sales, attributed to high property prices and limited availability of affordable options.
The high cost of living and congestion in the city center have also contributed to this trend.
- Delhi NCR In the Delhi NCR region, affordable home sales have dropped by 18%.
The region is facing similar challenges to Mumbai, with high property prices and a limited supply of affordable units.
However, some areas in the outskirts are showing signs of improvement.
- Bengaluru Bengaluru has seen a 12% decline in affordable home sales.
The city is known for its tech industry, which has driven a lot of demand for housing.
However, the high cost of living and limited affordable options have affected sales.
- Pune Pune has experienced a 10% drop in affordable home sales.
The city has been growing rapidly, but the supply of affordable housing has not kept pace with the demand.
- Chennai In Chennai, the decline is 15%, with similar factors affecting the market as in other cities.
- Hyderabad Hyderabad has seen a 13% drop in affordable home sales.
The city is a major IT hub, but the high cost of living and limited affordable options have impacted sales.
- Kolkata Kolkata has experienced a 14% decline in affordable home sales.
The city has a strong industrial base, but the high property prices and limited supply of affordable units have affected sales.
Recommendations
To address the decline in affordable home sales, the report suggests several recommendations for policymakers and developers
- Increase Supply Developers should focus on increasing the supply of affordable housing units, particularly in the suburbs and outskirts of major cities.
- Affordable Financing Policymakers should work on providing more affordable financing options to potential buyers, such as lower interest rates and longer repayment periods.
- Incentives for Developers The government should offer incentives to developers who build affordable housing projects, such as tax breaks and reduced regulatory hurdles.
- Urban Planning Cities should focus on better urban planning to ensure that new developments are well-connected and accessible, making them more attractive to buyers.
Conclusion
The decline in affordable home sales in 2024 is a cause for concern and requires immediate attention from both the government and the private sector.
By addressing the key factors contributing to this decline and implementing the recommended solutions, it is possible to revive the affordable housing market and ensure that everyone has access to a safe and affordable home.
JLL India About the Company
JLL India, a subsidiary of Jones Lang LaSalle, is a leading real estate consultancy firm that provides a wide range of services, including property management, leasing, and market research.
With a strong presence across India, JLL India is known for its expertise in the real estate sector and its commitment to providing valuable insights and solutions to its clients.
Frequently Asked Questions
What is the main reason for the decline in affordable home sales in 2024?
The main reasons for the decline in affordable home sales in 2024 include rising interest rates, economic uncertainty, and a shift in buyer preferences.
Which cities have seen the most significant decline in affordable home sales?
The cities that have seen the most significant decline in affordable home sales are Mumbai and Delhi NCR, with drops of 20% and 18%, respectively.
What is the recommended solution to address the decline in affordable home sales?
The recommended solutions include increasing the supply of affordable housing, providing more affordable financing options, offering incentives to developers, and focusing on better urban planning.
How are rising interest rates affecting the affordable home market?
Rising interest rates are making home loans more expensive, which has led to a decrease in demand for affordable homes as potential buyers find it difficult to afford the monthly installments.
What role does JLL India play in the real estate market?
JLL India is a leading real estate consultancy firm that provides a wide range of services, including property management, leasing, and market research, and is known for its expertise in the real estate sector.
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