Launched to offer cheaper homes to low- and mid-income families, the affordable housing scheme is facing major headwinds. As homebuyers shy away from the affordable homes segment, its share in the overall residential real estate market is shrinking steadily.
Data shows that the share of affordable homes in the overall residential sales across the top 8 markets in India fell to 40 per cent in 2022 from a high of 51 per cent in 2019. Meanwhile, as homebuyers’ willingness or ability to purchase affordable homes declines and cost of construction surges, developers have taken their eyes off the segment. The fall in new project launches in the segment is even starker. While in 2019 over 50 per cent of new residential units launched in these cities were in the affordable segment, its share reduced to 31 per cent in 2022.
According to Anuj Puri, Chairman of Anarock Group, the affordable housing sector is in dire straits. Despite major disruptions during 2020 and 2021, the residential real estate market bounced back quickly by early 2022, registering high double-digit growth in sales and, consequently, new launches. “However, there seems to be one major ‘fatality’—affordable housing. Once the source of considerable political hype, this segment is not merely just languishing today, it seems to be in the ICU (intensive care unit),” he says.
“With most mid-housing buyers severely affected on many levels by the coronavirus pandemic, the affordable housing sector had gone through a rough-patch post-pandemic,” says Yash Miglani, Managing Director of Migsun Group, a real estate developer that works extensively in the Noida, Greater Noida an Rajnagar Extension micro-markets of Delhi-NCR.
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Source: www.businesstoday.in
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