The COVID-19 pandemic is all set to derail the growth momentum of affordable housing in 2020.
This will be one of the worst-affected segments. ~ 6.1 lakh affordable units were under construction across the top 7 cities until the lockdown was announced, reveals ANAROCK’s latest report. This is over 39% of the total 15.62 lakh under-construction (UC) units in the top 7 cities – the highest share of all budget categories.
While the report estimates overall unsold housing inventory to shrink annually by 1-3% in 2020, the unsold affordable stock may actually increase by 1-2% in this period. As on Q1 2020 end, there are more than 2.34 lakh unsold affordable homes in the top 7 cities - 36% of the total unsold stock across all budget categories.
“The Government’s ‘Housing for All’ push coupled with multiple sops to buyers and developers brought on an avalanche of affordable housing projects in India," says Anuj Puri, Chairman - ANAROCK Property Consultants. "As much as 40% of the new supply added across the top 7 cities in the past few years was in the affordable segment (units priced < INR 40 Lakh). Resultantly, there is a huge under-construction supply of about 6.1 lakh units in the affordable segment.”
“This segment will be severely impacted by the current COVID-19 outbreak. The target audience typically has limited income and unemployment fears currently loom large. This could result in deferred property purchase decisions in 2020 and ultimately derail the segments’ growth momentum. As a result, unsold affordable stock can rise by 1-2% on a y-o-y basis.”
There are altogether over 6.1 lakh affordable units under construction across the top 7 cities, of which NCR and MMR alone account for nearly 59% - or 3.59 lakh units. These units were launched between 2013 to 2019. Both cities together also have a 57% share (approx. 1.34 lakh units) of the overall unsold stock of 2.34 lakh units in the budget homes category. (Unsold affordable stock consists of both under-construction and ready-to-move homes.)
Anuj Puri, Chairman of ANAROCK Group is a highly respected industry authority and thought leader with 30 years' experience in leveraging Indian and global real estate opportunities. His company ANAROCK has a staff complement of over 1800 qualified and experienced professional, with offices in all major markets in the country, dedicated services in Dubai and a global footprint with over 80,000 preferred channel partners.