NEW DELHI: As builders focus on developing luxury flats, new supply of affordable homes priced up to Rs 60 lakh declined 38 per cent to 33,420 units in eight major cities during January-March this year, according to PropEquity.
Real estate data analytical firm PropEquity attributed the decline in new supply to a sharp rise in land and construction costs, which has made the development of affordable housing projects less profitable or unviable.
According to PropEquity data, fresh supply of homes priced up to Rs 60 lakh in the top eight cities stood at 33,420 units during January-March 2024, compared to 53,818 units in the year-ago period.
These eight cities are - Delhi-NCR, Mumbai Metropolitan Region (MMR), Bengaluru, Hyderabad, Chennai, Kolkata, Pune and Ahmedabad.
PropEquity data showed that new supply in this price range declined by 20 per cent during the 2023 calendar year and the declining trend continued in the first quarter of this year.“The top eight cities in the country have seen a significant decline in the number of affordable housing units launched. In 2023, only 179,103 units priced below Rs 60 lakh were launched, a 20 per cent decline compared to 2022, Where 224,141 units were launched,” said Sameer Jasuja, CEO and MD of PropEquity.
He said this trend is expected to continue in 2024 as well.
“Many factors are contributing to this decline,” Jasuja said.Rising real estate prices (by 50-100 per cent in some cities in the last two years) and rising construction costs are making affordable housing projects less profitable for developers."
Additionally, he said, demand for larger homes post-pandemic is pushing developers towards mid-range and luxury segments, which offer higher margins.
Concerned over this trend, Nitin Gupta, Secretary, CREDAI NCR, Bhiwadi-Neemrana, said that it is necessary to give priority to affordable houses to realize the dream of home ownership for low and middle income individuals.
“Unfortunately, major NCR cities like Noida, Gurgaon and Delhi currently do not have adequate supply of these homes,” he said.
However, Gupta said developers are launching affordable housing projects in many tier II and III cities, including Bhiwadi.According to PropEquity data, new supply of homes priced up to Rs 60 lakh in MMR declined to 15,202 units during January-March from 22,642 units in the year-ago period.
In Pune, supplies fell to 6,836 units from 12,538 units.
New supplies in Ahmedabad fell to 5,504 units from 5,971 units.
In Hyderabad it came down to 2,116 units from 2,319 units, while in Chenna it came down to 501 units from 3,862 units.
New supply in Bengaluru decreased from 3,701 units to 657 units. In Kolkata, new supply declined to 2,204 units from 2,747 units.However, new supply of homes priced up to Rs 60 lakh in Delhi-NCR increased to 40 units in January-March this year, from 38 units in the year-ago period.
Jasuja also stressed the need to change the definition of affordable housing.
“As property prices have increased in all cities, units with properties up to Rs 6 lakh and/or 60 sq m area should be termed as affordable units”.
PE Analytics Ltd, which is listed on the stock exchange and runs the PropEquit platform, reported a 37 per cent rise in total income to Rs 44.17 crore in the last financial year from Rs 32.3 crore in 2022-23.
PropEquity is an online provider of analytics, data and deal flow covering the Indian real estate industry.The company tracks over 1,73,000 projects from 57,50 developers across 44 cities in India on a real-time basis. Its search platform generates analytics for all verticals under residential, commercial and retail sectors.
Real estate data analytical firm PropEquity attributed the decline in new supply to a sharp rise in land and construction costs, which has made the development of affordable housing projects less profitable or unviable.
According to PropEquity data, fresh supply of homes priced up to Rs 60 lakh in the top eight cities stood at 33,420 units during January-March 2024, compared to 53,818 units in the year-ago period.
These eight cities are - Delhi-NCR, Mumbai Metropolitan Region (MMR), Bengaluru, Hyderabad, Chennai, Kolkata, Pune and Ahmedabad.
PropEquity data showed that new supply in this price range declined by 20 per cent during the 2023 calendar year and the declining trend continued in the first quarter of this year.“The top eight cities in the country have seen a significant decline in the number of affordable housing units launched. In 2023, only 179,103 units priced below Rs 60 lakh were launched, a 20 per cent decline compared to 2022, Where 224,141 units were launched,” said Sameer Jasuja, CEO and MD of PropEquity.
He said this trend is expected to continue in 2024 as well.
“Many factors are contributing to this decline,” Jasuja said.Rising real estate prices (by 50-100 per cent in some cities in the last two years) and rising construction costs are making affordable housing projects less profitable for developers."
Additionally, he said, demand for larger homes post-pandemic is pushing developers towards mid-range and luxury segments, which offer higher margins.
Concerned over this trend, Nitin Gupta, Secretary, CREDAI NCR, Bhiwadi-Neemrana, said that it is necessary to give priority to affordable houses to realize the dream of home ownership for low and middle income individuals.
“Unfortunately, major NCR cities like Noida, Gurgaon and Delhi currently do not have adequate supply of these homes,” he said.
However, Gupta said developers are launching affordable housing projects in many tier II and III cities, including Bhiwadi.According to PropEquity data, new supply of homes priced up to Rs 60 lakh in MMR declined to 15,202 units during January-March from 22,642 units in the year-ago period.
In Pune, supplies fell to 6,836 units from 12,538 units.
New supplies in Ahmedabad fell to 5,504 units from 5,971 units.
In Hyderabad it came down to 2,116 units from 2,319 units, while in Chenna it came down to 501 units from 3,862 units.
New supply in Bengaluru decreased from 3,701 units to 657 units. In Kolkata, new supply declined to 2,204 units from 2,747 units.However, new supply of homes priced up to Rs 60 lakh in Delhi-NCR increased to 40 units in January-March this year, from 38 units in the year-ago period.
Jasuja also stressed the need to change the definition of affordable housing.
“As property prices have increased in all cities, units with properties up to Rs 6 lakh and/or 60 sq m area should be termed as affordable units”.
PE Analytics Ltd, which is listed on the stock exchange and runs the PropEquit platform, reported a 37 per cent rise in total income to Rs 44.17 crore in the last financial year from Rs 32.3 crore in 2022-23.
PropEquity is an online provider of analytics, data and deal flow covering the Indian real estate industry.The company tracks over 1,73,000 projects from 57,50 developers across 44 cities in India on a real-time basis. Its search platform generates analytics for all verticals under residential, commercial and retail sectors.
