Affordable housing keeps real estate sector afloat: PropTiger

In a recent report by digital real estate brokerage firm PropTiger.com, nearly half of the total housing demand in the primary residential market across eight major cities is for two bedroom apartments costing up to Rs 45 lakh. In its latest real insight report for January-March 2021 quarter, PropTiger research revealed that housing sales across eight major cities declined only by 5% year-on-year (y-o-y) at 66,176 units, indicating that demand is inching back to pre-Covid level. When compared with the Q1 2020, Mumbai, Pune and Bengaluru witnessed fall in sales, while 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 percent of sales in January-March 2021 were contributed by the affordable housing segment—apartments priced below Rs 45 lakh. Around 26% of the sales were in the Rs 45 to 75 lakh price bracket, 10% in Rs 75 lakh to Rs 1 crore and 19% above Rs 1 crore ticket size. As much as 44% of the total demand was for units with 2 BHK configurations. In line with expectations, the share of ready-to-move-in flats in total sales increased compared to preceding quarter. Housing sales in January-March this year almost reached to pre-Covid level driven mainly by low interest on home loans and stamp duty cut by the Maharashtra government, he said. However, Rangarajan feels that the recent outbreak of the second wave of Covid-19 and semi-lockdown in many states may put a brake on the revival of the housing demand seen during the last nine months. On the supply side, PropTiger research showed that new supply rose by 49% y-o-y 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 less than Rs 45 lakh category, with 45% share from the overall pie. The mid-segment (Rs 45–75 lakh price bracket) recorded a share of 27% of the total supply in the first quarter. More than Rs 75 lakh price bracket accounted for 28% of the total supply. Hyderabad and Ahmedabad witnessed 5% growth in January-March this year compared with the year-ago period. Affordable housing segment has been a top performer since the last few years. The government is providing tax incentives and interest subsidy to boost demand in this segment and achieve its target of Housing for All, said Mani Rangarajan, Group COO, Housing.com, Makaan.com and PropTiger.com Image Source