Incentives announced by the central government for the affordable segment have given a major boost to the realty sector.
In the latest research report by a leading real estate research firm covering the top 8 cities of India, affordable housing sector has recorded a surge of 27 per cent in new units launched (y-oy). Post announcements by the government to incentive affordable housing through industry status, many developers have shown interest in developing such projects. However, overall residential unit launches recorded a decline of 33 per cent, and were at approximately 60,000 units in the first three quarters of 2017 (January-September). Further, the first quarter of the year had the rollover challenges of demonetization (November 2016) to grapple with, leaving many developers no choice but to defer their launch plans.
Affordable housing segment demonstrated strongest trends to record a 27 per cent increase in the new units launched in these cities. More than 26,000 new units have been launched in 2017 so far. Of the total new launches in affordable units, 40 per cent were in Mumbai (10,500 units), followed by Kolkata and Pune. All other categories have seen a decline with highend (-66 per cent) and luxury (-84 per cent) segments witnessing a significant drop in new launches.
With government of India’s focus on ‘Housing for All’, affordable housing segment is expected to continue its momentum. To ensure that the momentum continues, government could also explore adding a few incentives on land acquisition costs as land cost is the largest component of project costs.
>> Affordable housing refers to units measuring up to 30 square metres (in carpet area) within municipal limits of 4 metro cities such as Delhi, Chennai, Kolkata and Mumbai and 60 square metres (in carpet area) for all other locations
>> Values for mid-segment are for units in the range of ₹5-10 million, except Delhi -NCR and Mumbai where the range in mid segment housing is typically between ₹5-17 million (20 million for Mumbai).
>> High-end segment values are for units typically priced above ₹10 million, except for Delhi and Mumbai (where it is more than 17 million in Delhi and 20 million for Mumbai).
> Top 8 cities include Ahmedabad, Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai, Pune.