Affordable Housing Sales Dip in Top Indian Cities: A Cause for Concern?
The Indian real estate market is witnessing a decline in affordable housing sales, with a 4% dip in top 8 cities. What's driving this trend?
Affordable HousingPropequityIndian Real EstateLuxury ApartmentsResidential PropertiesReal Estate PuneJun 16, 2024
A lower supply of affordable homes is one of the key factors contributing to this marginal fall in sales. The fresh supply of homes, up to Rs 60 lakh each, declined to 33,420 units during January-March 2024 across these top eight cities, from 53,818 units in the year-ago period.
Builders are shifting their focus towards launching luxury apartments to capitalize on the surge in demand for premium residential properties. Profit margins are also higher in luxury projects, making them more attractive to developers.
Despite the decline, sales of affordable homes have been steadily increasing over the past few years. In 2019, sales of homes priced up to Rs 60 lakh stood at 2,26,414 units. During the 2020 calendar year, which saw the outbreak of the Covid-19 pandemic, sales in this price category fell to 1,88,233 units. However, sales bounced back in 2021 and 2022 to 2,17,274 units and 2,51,198 units, respectively.
On a city-wise basis, Mumbai Metropolitan Region (MMR) saw a rise in sales of affordable homes to 28,826 units during January-March this year, from 23,401 units in the year-ago period. Pune witnessed a decline in sales to 12,299 units from 14,532 units, while Ahmedabad saw a fall in sales to 6,892 units from 8,087 units. Hyderabad, Chennai, and Bengaluru also saw declines in sales, while Kolkata saw a rise to 3,741 units from 2,831 units.
PropEquity, an online provider of analytics, data, and deal flows covering the Indian real estate industry, tracks over 1,73,000 projects of 57,500 developers across 44 cities in India on a real-time basis. The company reported a 37% growth in total income to Rs 44.17 crore last fiscal from Rs 32.3 crore in 2022-23.
The dip in affordable housing sales is a cause for concern, as it may lead to a shortage of affordable housing options for middle-class buyers. The Indian government has been promoting affordable housing through various initiatives, and this trend may require policymakers to rethink their strategies to ensure that the demand for affordable housing is met.
Frequently Asked Questions
What is the decline in affordable housing sales in top 8 Indian cities?
The sales of affordable homes, priced up to Rs 60 lakh each, have declined by 4% in eight major Indian cities.
What is the reason for the decline in affordable housing sales?
A lower supply of affordable homes is one of the key factors contributing to this marginal fall in sales.
Which cities saw a rise in sales of affordable homes?
Mumbai Metropolitan Region (MMR) and Kolkata saw a rise in sales of affordable homes.
What is PropEquity?
PropEquity is an online provider of analytics, data, and deal flows covering the Indian real estate industry.
What is the impact of the dip in affordable housing sales?
The dip in affordable housing sales is a cause for concern, as it may lead to a shortage of affordable housing options for middle-class buyers.
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