The affordable housing segment, i.e. <Rs 50 lakh, continued to have a higher share in total residential sales and contributed over 50% to the total sales in Q3 FY’17 across top 9 cities of India. The total number of affordable housing units launched in Q3 FY17, across the same number of cities, was recorded at 60% owing to growing demand, government support and increased participation from private players, stated a PropTiger.com report today.
The report, titled ‘Affordable Housing in India – Burgeoning and Compelling’, for the financial year 2016-17, highlights that Bengaluru, Noida, Pune and Gurgaon have shown a big appetite for affordable housing units, demonstrated by the fact that unit sales outstripped unit launches between Q4 FY’16 and Q3 FY’17. Based on the total number of affordable units sold between Q4 FY’16 and Q3 FY’17, Wagholi, Undri and Moshi in Pune, Dombivali in MMR and Techzone 4 in Greater Noida have emerged as the top-five affordable localities in India.
Commenting on the report, Anurag Jhanwar, Business Head – Consulting and Data Insights, PropTiger.com, Housing.com and Makaan.com, said, “With new policies, the government aims to provide a fillip to the building of 30 million homes for the economically weaker sections and low-income groups by 2022. This spells immense opportunity for private developers to explore affordable housing to fuel sales. Involvement from private players would play a significant role in bridging the current deficit of low-cost housing in urban areas. With renewed focus from the government, we expect this segment to gather momentum going forward.”
According to him, the affordable housing segment is currently plagued by a demand-supply mismatch and it is imperative that public-private-partnerships be given an impetus to achieve desired scale. Further, launching attractive schemes for slum redevelopment and rehabilitation, ensuring adequate availability of land, streamlining land records, including mass housing zones in City Development Plans (CDPs) and providing a single-window clearance mechanism would address supply side constraints.
The other key highlights of the report are as follows:
# Ahmedabad and Pune have witnessed a high share of total launches (~77%) in the affordable segment in Q3 FY’17.
# The highest absorption of affordable housing was recorded in Kolkata at 75% followed by Pune at 69% in Q3 FY’17.
# Low and mid-income earners working in manufacturing units, educational institutions and PSUs, and junior to mid-level executives working in IT/ITeS and BFSI sectors are driving the demand for affordable housing.
# Prices of affordable housing units have steadily increased over the past two years on the account of consistent increase in demand with supply not keeping pace. The magnitude of price increase was relatively higher in Bengaluru, Hyderabad and Pune.
# Out of the 9 key cities under consideration, Pune led the pack with lowest inventory overhang of 25 months as on Q3 FY’17.
# Due to robust end user demand, inventory overhang in Bengaluru, Hyderabad, Pune and Kolkata remained in a healthy range.
# There is a requirement of approx. 8 million residential units in India annually, which translates to a Rs. 8.6 trillion annual opportunity until 2022.
The study covered nine key Indian cities of Mumbai, Pune, Noida, Gurgaon, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.