Budget houses go out of budget; high interest rates and EMIs pinch buyers

Share of affordable housing in sales may fall for FY23, FY24

Sales of affordable houses, priced up to Rs 45 lakh, are losing steam due to higher mortgage rates and higher EMI outgo for borrowers.

The affordable segment accounted for 32 per cent of overall housing sales in FY22. India Ratings and Research expects that affordable housing sales will decline to 30-27 per cent of overall sales in FY23 and even lower in FY24 on a year-on-year basis.

"High interest rates and EMIs are already pinching the affordable and mid-ticket segment. The premium segment is less impacted by interest rates", said Mahaveer Shankarlal, director at India Ratings and Research.

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