Builders are now launching lesser number of homes priced Rs 40 lakh and below, as the share of affordable housing in the total new supply during July-September 2023 fell to 18 per cent across seven major cities, according to Anarock.
During July-September 2018, the share of affordable homes in the total new launches stood at 42 per cent.
According to Anarock data of top seven residential markets, the total new housing supply stood at 1,16,220 units during July-September 2023 and out of that 20,920 units (18 per cent) were in affordable housing categories.
In July-September 2018, the total new housing supply was 52,120 units, of which 21,900 units (42 per cent) were affordable homes.
In Q3 of 2019 calendar year, the share of affordable homes in new supply was 41 per cent, which came down to 24 per cent in Q3 of 2021.
The seven cities tracked by Anarock are -- Delhi-NCR, Mumbai Metropolitan Region, Chennai, Kolkata, Bengaluru, Hyderabad and Pune.
Real estate developers are focusing on launching more luxury housing projects to earn higher profits.
Profit margins in affordable housing category are less. Moreover, the high land cost has made development of affordable housing projects unviable.
While the share of affordable homes in total new supply is coming down, Anarock said the share of luxury homes priced more than Rs 1.5 crore is expanding rapidly, in fact tripled in the last five years.
Out of 1,16,220 units launched in July-September in the top 7 cities, 27 per cent (31,180 units) were in the luxury category.
"This is the highest quarterly luxury supply entering the market in the last five years," Anarock said.
Back in third quarter of 2018 calendar year, the supply share of luxury housing was just 9 per cent. Out of 52,120 units launched, just 4,590 were luxury homes.
Prashant Thakur, Regional Director & Head – Research, Anarock Group, said, “Developers have been bullish about the luxury homes segment because of its superlative performance after the pandemic, with overall sales rising steeply across the top 7 cities."
Post pandemic, he noted that homebuyers have been seeking bigger homes.
"...apart from high-end amenities and good location, luxury housing is primarily defined by generous floor space," Thakur said.
While luxury housing supply continues its bull-run, affordable housing (homes priced at or under Rs 40 lakh) has reduced further to 18 per cent in Q3 2023, he pointed out.