Budget-conscious homebuyers will feel the maximum heat of COVID-19; limited income and unemployment fears may cause many to defer purchase decisions in 2020
The COVID-19 pandemic is all set to derail the growth momentum of affordable housing in 2020. Budget-conscious homebuyers will feel the maximum heat of COVID-19 with limited income and unemployment fears forcing them to defer purchase decisions.
A lower demand could push up unsold affordable stock by at least 1-2 percent in 2020, a report has said.
Around 6.1 lakh affordable units were under construction across top seven cities until the lockdown was announced, said a report by Anarock. This is over 39 percent of the total 15.62 lakh under-construction (UC) units in the top seven cities – the highest share of all budget categories.
While the report estimates overall unsold housing inventory will shrink annually by 1-3 percent in 2020, the unsold affordable stock may actually increase by 1-2 percent in this period. As on Q1 2020 end, there were more than 2.34 lakh unsold affordable homes in the top seven cities - 36 percent 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," said Anuj Puri, Chairman - ANAROCK Property Consultants.
"As much as 40 percent of the new supply added across the top 7 cities in the past few years was in the affordable segment (units priced less than Rs 40 lakh). Resultantly, there is a huge under-construction supply of about 6.1 lakh units in the affordable segment,” he said.
There are altogether over 6.1 lakh affordable units under construction across the top seven cities, of which NCR and MMR alone account for nearly 59 percent - or 3.59 lakh units. These units were launched between 2013 to 2019. Both cities together also have a 57 percent share (approximately 1.34 lakh units) of the overall unsold stock of 2.34 lakh units in the budget homes category.
NCR has the maximum under-construction affordable housing stock with more than 1.87 lakh units. Unsold stock in this budget category is nearly 64,430 units in NCR.
MMR is next with nearly 1.72 lakh affordable units under construction. The unsold affordable stock as on March 2020-end is 68,970 units.
In Pune, under-construction affordable housing stock is close to 1.31 lakh units, while unsold affordable homes stand at nearly 46,630 units.
Kolkata continues to have the maximum new supply in the affordable housing category, with a current inventory of 55,300 affordable units (priced within Rs 40 lakh) under construction. The city's unsold affordable housing stock is 27,040 units as on Q1 2020 end.Bengaluru has merely 16 percent (or 32,300 units) under construction in the affordable category, out of a total of 2 lakh units under construction. This is the lowest share among all top seven cities. Unsold affordable housing stock in Bangalore is currently just 14,800 units.
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