Affordable housing keeping Indian real estate afloat
01 Jun 2021
Nearly half of the total housing demand in the primary residential market across eight major cities is for two-bedroom apartments costing up to `4.5 million, according to PropTiger. In its latest Real Insight report for the January-March 2021 quarter, PropTiger research revealed that housing sales across eight major cities declined only by 5 per cent year on year (YoY) at 66,176 units, indicating that demand is inching back to the pre-COVID level.
Compared to Q1 2020, Mumbai, Pune and Bengaluru witnessed a fall in sales, while the other five cities – Delhi-NCR, Kolkata, Chennai, Hyderabad and Ahmedabad – saw growth in demand.
While analysing the sales numbers of these eight cities, it was found out that around 45 per cent of sales in January-March 2021 were contributed by the affordable housing segment – apartments priced below Rs.4.5 million. Around 26 per cent of the sales were in the Rs.4.5-7.5 million price bracket,
10 per cent in the Rs.7.5 million to `10 million bracket and 19 per cent above Rs.10 million ticket size. As much as 44 per cent of the total demand was for units with two-BHK configurations. In line with expectations, the share of ready-to-move-in flats in total sales increased compared to the preceding quarter.
“The affordable housing segment has been a top performer in the past few years,” says Mani Rangarajan, Group COO, Housing.com, Makaan.com and PropTiger.com. “The government is providing tax incentives and interest subsidy to boost demand in this segment and achieve its target of Housing for All.”
On the supply side, PropTiger research showed that new supply rose by 49 per cent YoY to 53,037 units across these eight cities during the first quarter of this calendar year.
In line with demand trends, new supply continues to be concentrated in the under Rs.4.5 million category, with a 45 per cent share of the overall pie. The mid-segment (Rs.4.5-7.5 million) recorded a share of 27 per cent of the total supply in the first quarter. The over Rs.7.5 million price bracket accounted for
28 per cent of total supply.
“Weighted average prices for new launched projects in a majority of India’s top cities remained muted in the past few quarters, with prices appreciating marginally in the range of 1-3 per cent annually,” the report said.
Hyderabad and Ahmedabad witnessed 5 per cent growth in January-March this year compared to the same period a year ago.
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