housing demand in India. The affordable housing segment, by virtue of being in the smaller ticket segment, is relatively less rate-sensitive than the mid and luxury segments. Rate hikes of 250 bps in a short period of less than a year have had some impact on the consumer's psyche and we did see some degree of postponement in purchase when the cycle was underway.
However, post stability after the series of hikes, the last 3-4 months have again witnessed an uptick in demand. At a closer look, the relative drop in the affordable housing demand in the recent past is more or less an urban phenomenon. The decline is seen particularly in metro cities.
An urge for upward mobility is a prominent characteristic of urban consumers. Most often, those who can afford to buy a house in the affordable segment with less reliance on loans will look for an upgrade to the mid-segment even at the cost of high leverage. So, those who remain in the low-income group will have no cushion to absorb interest rate shocks.
Within the affordable housing segment, we are witnessing different trends in urban vs semi-urban segments. On the urban side, high land costs and rising material costs make the affordable housing segment unattractive for realtors. Consequently, the share of affordable homes in the overall residential realty market is shrinking rapidly.
According to property consultant Anarock’s latest report, real estate developers are now launching a lesser number of affordable housing units and more mid and luxury-segment projects. The data reveal that the share of affordable homes in the total new supply during Q2FY24 fell to 18% in seven major cities and in 2018, it was 42%. In the total launches too, the share of affordable homes has been
. Read more on livemint.com