COVID-19 Derails Affordable Housing Growth In 2020, ~ 6.1 Lakh Units Impacted in Top 7 Cities
- 6.1 lakh units is 39% of total 15.62 lakh under-construction homes in the top 7 cities – the maximum among all budget segments
- NCR & MMR together account for a massive 59% of 6.1 lakh affordable UC units; Hyderabad has the lowest affordable UC stock at approx. 11,000 units
- Budget-conscious home buyers will feel the maximum heat of COVID-19; limited income & unemployment fears will cause many to defer purchase decisions in 2020
- Of the total unsold units in the top 7 cities (Q1 2020 end) budget homes (<INR 40 lakh) account for over 36% share
- With lower demand, the unsold affordable stock will increase by at least 1-2% in 2020
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.
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.
Chief Executive Officer at Sarthak Advocates & Solicitors
4 年Dear Anuj Puri , Your posts regarding reality Sector have been a source of knowledge to me. I can't thank you enough. Let's hope that the sector recovers soonest though restarting construction, mobilising workforce, procuring materials in view of disruption in supply-chain, not to speak of financial stress that the sector especially the residential real estate has been experiencing for a while now due to deceleration and a glut of unsold inventory, are likely to add to the woes of the developers on one hand, and consequent delays leading to frustration and stress of homebuyers, who will face a double whammy of paying interest on their housing loans while forced to pay monthly rentals.