New affordable homes supply dips 38% in 8 metros in Jan-March quarter, reveal data
New supply of affordable homes dipped by as much as 38% in eight major cities in the January-March quarter to touch 33,420 units
Though luxury and premium homes are being lapped up in a matter of hours of launch, sales of affordable homes are declining in the country, data from PropEquity, a real estate data analytic firm, has shown.
Flats that are priced within Rs 60 lakh were categorised as affordable homes. ProEquity tracks more than 1.73 lakh projects belonging to 57,500 developers in 44 Indian cities.
According to a report in the Business Standard the new supply of affordable homes dipped by as much as 38% in eight major cities in the January-March quarter to touch 33,420 units. In the corresponding quarter in 2023, the supply of these homes stood at 53,818 units.
These metros are Mumbai Metropolitan Region (MMR), Bengaluru, Kolkata, Delhi-NCR, Hyderabad, Chennai, Ahmedabad and Pune.
According to the data analytic firm spike in the price of land and construction costs have pushed up prices and therefore, triggered a decline in affordable homes since developers find this segment less profitable.
“The number of affordable housing units launched in the top eight cities of the country has seen a significant decline. In 2023, only 179,103 units priced under Rs 60 lakh were launched, a drop of 20 per cent compared to 2022, wherein 224,141 units were launched. Several factors are contributing to this decline. Rising real estate prices (up to 50-100 per cent in some cities over the past two years) and increasing construction costs are making affordable housing projects less profitable for developers,” remarked Samir Jasuja, chief executive officer and managing director of PropEquity. According to him, this trend is likely to continue this year.
Supply of homes up to Rs 60 lakh declined 20% during 2023 calendar year.
Nitin Gupta, Secretary, CREDAI NCR, Bhiwadi-Neemrana expressed concern at this trend. According to Gupta prioritizing affordable homes is essential to make the dream of lower and middle-income individuals buying homes of their own.
“Unfortunately, major NCR cities like Noida, Gurgaon, and Delhi currently lack sufficient supply of these homes,” Gupta said. He, however, pointed out that developers in tier II and III cities are launching affordable housing projects.
The situation is changing so fast that Jasuja thinks perhaps there is a need to change definition of affordable housing. “As the prices of properties have gone up across cities, properties up to Rs 60 lakh and/or units having 60 square meter area should be termed as affordable units”.
City-wise disaggregation
PropEquity data reveal that the supply of new under-Rs-60-lakh homes fell markedly in all the metros. In MMR it went down from 22,642 units in January-March 2023 to just 15,202 in the same quarter this year.
In Pune, the dip was sharper – from 12,538 units to 6,836.
Ahmedabad recorded a decline from 5,971 to 5,504 units, while in Hyderabad only 2,116 flats in that price range were completed down from 2,319 units a year ago.
Chennai’s number fell from 3,862 to 501 units – a drop by 87%. The number fell from 3,701 to 637 units in the tech capital of Bengaluru registering a drop of nearly 83%.
Kolkata witnessed a decline of new supply from 2,747 to 2,204 units.
The only exception was Delhi-NCR that recorded a rise from 38 units in January-March quarter in 2023 to 400 this year.