The previously ‘unaffordable’ real estate markets of NCR and MMR have led the thrust of affordable housing – in both new supply and housing sales – over the last five years. ANAROCK Property Consultants’ latest report.
It is the biggest shift that the Indian real estate market has seen so far. The previously ‘unaffordable’ real estate markets of NCR and MMR have led the thrust of affordable housing – in both new supply and housing sales – over the last five years. ANAROCK Property Consultants’ latest report ‘Affordable Housing: The Blue-Eyed Boy of Indian Real Estate’ confirms that these two regions contributed a whopping 55% share of the overall new budget housing supply between 2014 and 2018.
The report, which knowledge partners ANAROCK unveiled at the CII Real Estate Confluence 2019 in Mumbai today, also finds that of the total number of units launched during this period, approximately 3.98 lakh were budget homes. Again, NCR and MMR contributed the highest share of sales at 57%. The report also analyses the state-wise housing shortage and highlights the major affordable housing localities of MMR and Pune along with their growth drivers.
Anuj Puri, Chairman – CII Real Estate Confluence 2019 and Chairman – ANAROCK Property Consultants says, “The ‘Housing for All by 2022’ mission threw a much-needed lifeline to the affordable housing segment. The term ‘affordable’ has become respectable and builders who earlier shied away from it now hold huge portfolios in this category. This segment grew tremendously on the back of multiple sops introduced to both buyers and developers over the last five years.”
Affordable housing was given the much-coveted infrastructure status, and the very definition of affordable housing has been tweaked to accommodate more inventory under this key category. Moreover, the previously highly speculative markets of NCR and MMR have been tamed and are, in fact, leading the thrust of affordable housing today.
“The anticipated 8-10% annual growth of this segment is also luring investors,” says Puri. “Data further suggests that out of the total 15.3 lakh units launched across the top 7 cities between 2014 and 2018, affordable housing contributed about 6 lakh units – 39% of the overall supply. The rise in affordable housing supply has also helped improve sales numbers in later years, indirectly resulting in a 16% drop in unsold inventory between 2016 and 2018.”
The incumbent Government’s flagship mission of providing one crore homes to the urban poor by 2022 under Pradhan Mantri Awas Yojana (PMAY) was squarely in the spotlight during this five-year period. As on date, 79% homes have already been sanctioned but the pace of development needs to pick up. The report examines the lack of desired progress and highlights some of the major challenges it has faced.
Some of the key deterrents for speedier affordable housing development are scarcity of land, illegal settlements and slums, and limited private sector participation – despite several fiscal and statutory benefits to attract private players.
For instance, the Maharashtra Housing and Area Development Authority (MHADA) – the key agency for deploying affordable housing under Government schemes in Maharashtra – is expected to set up a INR 7,000 Cr shelter fund to support development in this segment. With financial and policy support coming from the Central and State governments, affordable housing projects may now attract more private participation.
Other Report Highlights:
- The current urban housing shortage in India is about 18.78 million homes, of which Maharashtra targets to develop 1.94 million units by 2022.
- The share of affordable housing in MMR rose from 41% in 2013-14 to 55% during 2015-18 as developers went back to their drawing boards to focus more on this segment and tap its potential.
- MMR’s Peripheral Central Suburbs dominate the city’s affordable housing supply with a 55% share of launches in this segment between 2013 and 2018.
- North Pune is the dominant zone for affordable housing supply in this city, accounting for 66% of the total supply in the region between 2013 and 2018.
- Micro markets such as Badlapur, Neral, Vangani, Panvel and Ambernath in MMR and Wagholi, Talegaon Dabhade and Moshi in Pune are some of the most buoyant affordable housing locations