Share of affordable housing down to 18%

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Builders are now offering lesser number of affordable houses priced under Rs 4o lakh. According to a report by  property consultant Anarock, in the July-September quarter, the share of cheaper or affordable houses on offer in seven major cities of the country has come down to only 18 percent. In July-September 2018, the share of affordable houses in the total new housing launches was 42 percent.

According to this report, the total supply of new houses during July-September 2023 was 1,16,220 units. In this, the share of affordable houses was 20,920 units or 18 percent. The total supply of new homes in July-September 2018 was 52,120 units, of which 21,900 (42 percent) were affordable homes.

The share of affordable houses in new supply was 41 percent in the third quarter of the financial year 2018-19, which decreased to 24 percent in the third quarter of 2020-21. Anarock’s report includes data from seven cities – Delhi-NCR, Mumbai Metropolitan Region, Chennai, Kolkata, Bengaluru, Hyderabad and Pune.

It is believed that builders are now focusing more on luxury residential projects to earn more profits. The profit margin in cheap houses is also less. Moreover, due to the high cost of land, affordable housing projects are no longer economically viable for builders.

Increasing demand for luxury homes

Anarock said that while the share of affordable homes in total new supply is declining, the share of luxury homes priced above Rs 1.5 crore is increasing rapidly. In fact, it has tripled in the last five years. Of the 1,16,220 units launched in July-September in the top seven cities, 27 per cent (31,180 units) were in the luxury category. Anarock said that this is the highest figure of supply of luxury houses in the last five years.

Demand for big houses increased after the pandemic

In the third quarter of FY 2018, the share of luxury homes in the total supply was only nine percent. Of the 52,120 units offered at that time, only 4,590 were in the luxury category. Anarock Group regional director and head of research Prashant Thakur said developers are bullish on the luxury housing segment due to its stellar performance post-pandemic. Thakur said that after the pandemic, home buyers want to buy a bigger house. Apart from this, they are giving priority to buying a house with better facilities and at a place of their choice.