While the Prime Minister Narendra Modi-led government is leaving no stone unturned to meet the housing-for-all-by-2022 target, India’s major cities by the end of June had an inventory that consists of over 4 lakh affordable units priced below Rs 45 lakh, indicates the data available withPropTiger.com, part of Elara Technologies Pte Ltd which also owns Housing.com, Makaan.com, and FastFox.com.
This is half of the housing stock Indian property markets currently have overall. Numbers available for the April-June quarter show real estate developers across India’s nine key markets have an overall inventory consisting 797,623 units.
Taking stock of inventory: Burden seen lessening in future
Inventory stock, however, in the affordable housing category declined over 12% when compared to a year-ago period, data show. India’s nine key markets had an inventory stock consisting of 471,372 units in Q1 FY’19. This number has reduced to 412,930 in Q1 FY’20.
A city-wise analysis shows Mumbai contributed nearly 1.39 lakh units to this stock, the highest seen in a city during the quarter. This is despite the maximum city registering a 15% decline year-on-year in its affordable housing inventory. Hyderabad saw the sharpest fall in its inventory stock in the past one year. By the end of June, the City of Nizams had only 4,881 units in its inventory stock.
|City||Affordable Housing – Unsold Inventory as on quarter end|
|Q1 FY19||Q1 FY20||YoY Change|
However, real estate developers might see their inventory stock decline substantially in the September quarter, with the government incentivizing purchase of affordable properties.
Announcing the Union Budget on July 1, Finance Minister Nirmala Sitharaman said the government would offer an additional Rs 1.5 lakh deduction on interest paid towards units priced within Rs 45 lakh. Property owners would now be able to claim Rs 3.5 lakh deduction on their home loan interest in a year. Interest rates on home loans have also declined after the RBI brought repo rate to a record low this year. These measures are likely to push demand for affordable homes in the near future.
Dhruv Agarwala, Group CEO,Housing.com, PropTiger.com, Makaan.com, Fastfox.com said, “A low interest rate regime along with the measures announced in the Budget to push affordable housing would encourage homebuyers to invest actively in this category now. New launch numbers, however, may not see much improvement since developers are entirely focused on delivering their ongoing projects. With these two factors at work, affordable housing inventory in India’s key property markets is likely to decline significantly in the following quarters.”
Gauging popularity: Sales, launches fall
An annual comparison shows sales as well as new launched in the affordable housing segment declined in the June quarter when compared to the same quarter last year.
As against, 42,828 units in Q1 FY’19, only 39,824 units were sold in Q1 FY’20, a decline of 7%. The sharpest decline in sales during the period was registered in Noida and Hyderabad while a pick-up in sales of affordable units was seen in Gurugram, Kolkata and Chennai.
As against 41,354 units launched in June quarter last year, only 18,042 units were launched in the same quarter this year, resulting in a decline of over 56%. Except Gurugram, where the numbers tripled, new launches declined in all other cities during the quarter. The most dramatic fall in launches was however seen in Ahmedabad, where only 259 units were launched during the quarter ending June, as against 5,403 units in Q1 FY’20.
|Q1 FY’19||Q1 FY’20||YoY Change||Q1 FY’19||Q1 FY’20||YoY Change|