Amid lower demand, new supply of affordable homes dipping in India: Anarock

On the other hand, the supply of luxury homes is rising as developers are focusing on earning higher margins and profits

Real estate builders are now launching fewer affordable homes, priced Rs 40 lakh and below, compared to the pre-coronavirus era, data released by realty consultancy Anarock said on Monday. In July-September 2023, 20,920 units of affordable homes were launched. In 2018, during the same quarter, it was 21,900 units.

The seven cities tracked by Anarock are - Delhi-NCR, Mumbai Metropolitan Region, Chennai, Kolkata, Bengaluru, Hyderabad and Pune.

The data also showed that the share of affordable homes in the total new supply during July-September 2023 fell to 18 per cent across seven major cities in India. In 2018, this was at a higher 42 per cent.

The share of affordable homes in the total launches has been falling since 2018. In July-September 2019, the share of these homes in the new supply was 41 per cent. In 2021, it was 24 per cent.

On the other hand, real estate developers are focusing on launching more luxury homes to earn higher profits as they offer higher margins. These homes are priced at Rs 1.5 crore and above.

From 4,590 units in July-September 2018, the number of these homes launched rose to 31,180 units in 2023. The market share of the launch of these homes has, in fact, tripled in the last five years.

Out of 116,220 units launched in July-September this year, 27 per cent were in the luxury category. In 2018, the supply share of luxury homes was just 9 per cent.

"This is the highest quarterly luxury supply entering the market in the last five years," Anarock said.

Hyderabad saw the highest new luxury supply in the quarter this year of 14,340. It comprised nearly 46 per cent share of the total new luxury supply in the quarter.

Hyderabad was followed by Mumbai Metropolitan Region (MMR) with the launch of 7,830 luxury homes. NCR ranked third with a luxury supply of 3,870 units.

Prashant Thakur, regional director and head (Research), Anarock Group, said, "Developers have been bullish about the luxury homes segment because of its superlative performance after the pandemic, with overall sales rising steeply across the top seven cities."

"Post-pandemic, homebuyers have been seeking bigger homes and apart from high-end amenities and good location, luxury housing is primarily defined by generous floor space."