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Affordable housing sales in seven major cities fall 18% in Jan-Jun

2023-07-25

According to anarock, sales in the affordable housing category priced below Rs 40 lakh fell 18 percent to 46,650 units in the January-June period across seven major cities due to fewer supply and a hike in borrowing rates.

In the same period the previous year, sales of affordable housing totaled 57,060 units.

According to a survey by real estate consultant Anarock, the ratio of affordable housing in total house transactions declined to 20% in January-June from 31% in the previous year's corresponding period.

Total housing sales increased to 2,28,860 units in January-June this year, up from 1,84,000 units the previous year.

Anarock chairman Anuj Puri attributed the declining share of affordable homes in overall sales to changes in demand dynamics caused by the COVID pandemic, as well as a number of other issues encountered by developers and customers.

Stating that the land cost that has gone up significantly, Puri said, “It is becoming increasingly unviable for developers to buy land at higher prices to build low-margin mass housing.”

Other input costs have also risen inexorably in the last few years, he added.

“Launching affordable housing projects has become unattractive,” Puri said.

Prospective home buyers in the affordable segment are postponing their purchase decision due to the rise in the housing prices as well as interest rates on home loans, Anarock said.

On the supply side, the data revealed that the share of affordable homes in total new launches across seven cities was 18% in January-June, compared to 23% the previous year.

According to Anarock data, sales of affordable homes in Delhi-NCR decreased to 8,860 units in the January-June period this year, down from 14,150 units the previous year.

During the review period, sales in the Mumbai Metropolitan Region fell slightly to 17,470 units from 17,650 units.

In Bengaluru, sales of low-cost homes fell to 3,270 units from 3,990 units.

In Pune, this category sold 9,700 units, down from 11,240 units in the first half of last year.