COVID-19 takes toll, affordable housing supply share reduced to 20% in top 7 cities

The coronavirus pandemic, which has hit the real estate sector hard, is more severe in the affordable housing sector, with supply share declining to 20% in the top seven cities in the second quarter of 2021, says Anarokku of Real Estate Consulting. Of the 36,260 units released in the city
in the June quarter, only 7,230 units were priced below Rs 40 racks, accounting for 20% of new releases, Anarokku said in the report.
The loss of the cheap segment means a profit for the mid-segment and premium-segment houses, the prices are from 4080 rupees and 80 rupees to 1.5 rupees respectively.
“The sales share of the premium segment was the highest at 36% (about 13,130 units), followed by the mid segment with 32% (about 11,760 units),” said Anujipuri, chairman of Anarokku, about the second quarter.
Delay in new construction may be related to the accumulation of homes sold. Of the 4444 unsold units in the top seven cities for the June quarter of 6,544, the affordable segment had the highest share at 33%, the report said.
Despite the government’s continued demand for affordable housing, private businesses have changed their strategies to adapt to the ‘new normal’ caused by the pandemic.
Real Estate Developers are strategically very keen on the fact that homebuyers of affordable homes have been hit hardest by the pandemic, which has led to job loss, business closures and loss of livelihoods, particularly in affordable housing. Uncertainty in the economy has forced people to postpone their home purchases. Abundant supply began in the top 7 cities after the
government began to incentivize the sector to meet the “all homes by 2022” goal after 2014. Demand for affordable housing is still high, but unsold inventory is accumulating throughout the city.
Seven cities are ranked according to population and economic activity: Chennai, Pune, Bengaluru, Hyderabad, Mumbai, Delhi and Kolkata. For
affordable home developers, the margins are very thin. Starting a house on a budget is becoming difficult as basic input costs such as cement, steel, and labor are rising, and raising prices in this very cost-sensitive sector is discouraged. In addition, the overall number of units sold has decreased due to the pandemic last year.

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