A new real estate research shows high demand for affordable housing has led to doubling of launches in first half of 2016. Here is what is driving this market.
The introduction of an affordable housing scheme has changed the face of real estate industry in the NCR region, even when the development of high-end properties hasn’t come to a halt. The current real estate market is driven by an affordable housing price tag. Steady demand for affordable housing and the government’s move to increase its supply has led to a near doubling of new launches in this segment in the first half of 2016.
In a recent report by real estate services firm Cushman & Wakefield – the number of new launches in affordable housing has increased by nearly 100 per cent on year to 17,000 units across top realty market such as Delhi NCR, Mumbai, Bangalore, Pune, Kolkata, Chennai, Ahmedabad and Hyderabad.
According to Dhiraj Jain, director, Mahagun Group, “Housing choices that people make are completely dependent on their economic, social and psychological impulses. While some may choose to spend more on housing because they feel they can afford to, others may not have a choice. This portion of population that migrates to urban areas for jobs is the main driver of affordable housing. Developers across the country know better the potential demand in this segment and new launches is part of their strategy”.
Property supply and absorption trend observed in quarter (Apr-May 2016)
As per the study by Cushman & Wakefield, total launches across the segments rose by 17% from a year ago to 60,000 apartments. Low-cost housing saw the highest number of launches at 36,267 units which is 10% on-year rise. Pune witnessed highest number of launches with 4,170 units followed by Bangalore at 4,155 units. In the first quarter of 2016, Mumbai was on the top with over 12,000 units while Bangalore stood second with approximately 11,000 units of new residential units launched.
However, the performance of Delhi-Capital Region is recorded poor in this segment. Affordable housing launches in Noida and Greater Noida, recorded a drop of 44 per cent. The Delhi-NCR locality witnessed 19 per cent decline in average launch price from a year ago, while the average unit saw a 5 per cent increase. The recent hike in residential land allotment rates in Noida might have affected the market, says real estate experts.
City-Wise New Launches in the Affordable Housing Segment
- Pune – 4,170 Units
- Bengaluru – 4,155 Units
- Delhi-NCR – 2,985 Units
- Ahmedabad – 2,445 Units
- Kolkata – 2,000 Units
- Mumbai – 1,266 Units
- Hyderabad – 109 Units