Affordable housing units witnessed declined 36 per cent in first quarter of 2016 in comparison to first quarter of 2014 as realty developers focused on attracting buyers with smaller sizes.
During the first quarter of 2016 affordable housing segment accounted for 35 per cent of total launches at 10,950 units. The overall launch across across the top eight – Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai and Pune cities posted an increase of 27 per cent year–on–year at approximately 31,200 units, according to property consultants Cushman & Wakefield.
This clearly indicates that developers are betting more on the affordable segment, which has a strong backing from the government as well.
“Developers have come to realise the vast potential that was remaining untapped in the affordable housing segment. They have now come to recognise the potential of the segment and are expecting greater momentum in demand in the affordable segment as customers are seen to be more price-sensitive in the current market,” said Shveta Jain, Executive Director, Residential Services at Cushman & Wakefield.
The survey also analysed the affordable housing prices in Mumbai, Pune, Delhi-NCR and Kolkata. Affordable housing units witnessed declined 36 per cent in first quarter of 2016 in comparison to first quarter of 2014 as realty developers focused on attracting buyers with smaller sizes. The rationlaisation in launch price may help the sales in highly price-sensitive segment.
In a bid to boost low-cost housing, Delhi like Mumbai saw a dip of 10% in first quarter of 2016 as compared to Q1 2014 in Delhi-NCR. This drop in launch price of affordable units was brought about by a mixed strategy of lowering the average launch prices and by resizing the units.
Per square feet rate in Mumbai came down from Rs 6.760 in Q1 2014, to Rs 4,300 in Q1 2016.
“With strong emphasis on affordable housing by the government, tax incentives extended by the government, as well as the cautious approach by end-users in other segments, developers are betting on the affordable segment,” Jain added.
In Pune, the average launch price was noted at Rs 3,747 per square feet in first quarter of 2016, a 25 per cent decline over Q1 2015 levels.
Developers in Kolkata also made a conscious attempt to offer apartments of smaller size. The average launch price in the affordable segment declined 5 per cent to Rs 2,420 per square feet in Q1 2016, compared to Q1 2014.