In spite of high demand for affordable homes, their supply in the market is shrinking fast. As per latest data, unsold inventory in the affordable housing space has shrunk by over a fifth since the pandemic began in early-2020.
During the January-March quarter, the number of unsold affordable housing units in the top seven markets stood at 186,150, which is 21 per cent lower than the 234,600 units that the market had in the same period in 2020 - according to Anarock Property Consultants.
Last year, the number fell to 217,630 units - 7.25 per cent lower year-on-year from 2020. While in 2022, the fall was steeper - 14.5 per cent y-o-y. Homes that are priced below Rs 45 lakh are considered affordable.
Among the top markets, Chennai recorded the highest fall - 52 per cent in the last two years, followed by Pune (33 per cent), Mumbai Metro Region (27 per cent), National Capital Region (13 per cent), Bengaluru (10 per cent) and Hyderabad (5 per cent). While in Kolkata the unsold inventory remained intact.
“Affordable housing took the biggest hit from the pandemic, with the first perceivable change being its declining share of new supply. Data reveals that out of 70,480 units launched in the top seven cities in Q1, 2019, affordable housing had a 44 per cent share. This segment's supply share has been declining y-o-y, reducing to 38 per cent in Q1, 2020 and further to 30 per cent in Q1, 2021. In Q1, 2022, its share of new supply had declined to 25 per cent”, said Anuj Puri, Chairman, Anarock Group.
According to him, this is the highest supply reduction among all budget categories that clearly reflects “an enduring demand for affordable homes.”
Unsold stock in the ultra-luxury homes segment that are priced above Rs 2.5 crore, in the top seven cities recorded a five per cent decline in the same period – from around 41,750 units in end-March, 2020-end to 39,810 units in end-March, 2022. MMR and Kolkata witnessed maximum reduction in unsold ultra-luxury inventory, shedding 16 per cent and 15 per cent, respectively.
Currently, overall, there are 627,780 units that lie unsold across the top seven cities. Out of which, 30 per cent or 186,150 units are in the affordable homes segment.
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