Luxury Shining But Affordable Housing Is Indian Realty’s Show-Stopper

While affordability might be the most popular phenomenon defining the housing market in a country, the growth of the rich is also seen as driving the luxury housing demand simultaneously. This segment’s activity is not quite dissimilar to that of the affordable housing segment, where investment has been heavily incentivised by the government in the recent past.

Luxury versus affordable: The number crunching

Sample this.

Between January 2017 and September 2019, a total of 1,100 units priced over Rs 7 crore or nearly a million dollars, were launched across the major Indian markets. Nearly half of these units are already sold. Considering the corpus involved, this is indicative of an active buyer interest in the segment.

In comparison, 48 per cent of over 3.98 lakh units launched during the same period in the government- defined affordable category (units priced below Rs 45 lakh) remain unsold, the incentives offered on such property purchase notwithstanding.

Coming back to luxury homes, a total of 3,435 units with a total worth of Rs 24,045 crore were sold during the nearly three year period that followed the government’s move to ban currency of high-value denominations in November 2016.

However, in terms of worth, affordable property is a clear show stealer. In the same period, over 4.47 lakh affordable housing units were sold in the major markets of the country, shows PropToger.com data. Of these, over two lakh units were priced below Rs 25 lakh, while the remaining were priced between Rs 26- 45 lakh. The combined worth of these units approximately, would be Rs 1.4 lakh crore.

Going by the same calculation, affordable properties worth over the same amount, are currently lying unsold in nine major Indian markets. In contrast, properties worth Rs 34,923 crore remain unsold in the luxury segment. 

Developers continue to launch projects in both these categories because of the scope affordable housing provides and the resilience and consistency, the luxury segment provides. While luxury housing projects continue to be a phenomenon in mostly mega cities, affordable housing projects are spread across every nook and corner of India.