Launches subdued, affordable housing hit

New launches in the real estate sector remained subdued for six months continuously till May. The new launches based monthly at the pan-India level dropped 46%. A favourable base of the previous year makes the new launches data appear strong. However, analysts warn against getting carried away. Through share launches in May, Pune and Hyderabad notched up profits of 18-20% month-on-month (m-o-m) respectively. MMR recorded the highest declines of 17% m-o-m, followed by Bangalore, Chennai, and National Capital Region (NCR), which logged reductions of 5-11% m-o-m each. The share of Kolkata remained stable, recording only an increase of 3% m-o-m. According to the Anarock Property Consultant firm, the pandemic changed earlier prevailing trends in the Indian residential market. It dented the new affordable housing supply share over the top seven cities. Anarock told the media that out of the total new launches, almost 36,260 units across the top seven cities in Q2 2021, the affordable segment, priced at nearly Rs 40-80 lakh, provided only a 20% share. Despite the incumbent, the government continued to focus on affordable housing. Private members also changed their plans on the back of the pandemic. The demand further continues to remain weak, keeping unsold inventory elevated. As per the analysts, though the supply is growing down in the wake of bleak demand, offloading the current stock would be difficult for the real estate sector. An Anarock report announced that among the growing inflationary trends of basic input prices (cement, labour, steel, among others), it is now challenging for them to launch budget homes because of the increasing prices in this highly cost-sensitive segment during this time. Image Source Also read: Affordable housing keeping Indian real estate afloat Also read: Govt to look into housing industry’s demand to support realty sector