Affordable Housing Supply Share at 20% in 2022 – Where Is It Headed?

Despite all these upheavals and market realignments in the past three years, India's housing market remained remarkably resilient and even thrived. However, there seems to have been one major 'fatality' - affordable housing. Once the source of considerable political hype, this segment is not merely just languishing today - it seems to be in the ICU. What happened?
The mid-range (INR 40 - 80 lakh), premium (INR 80 lakh – INR 1.5 Cr), and luxury segments (>INR 1.5 Cr) were the showstoppers of 2022. In contrast, affordable housing had a lean time, with more buyers in this segment going into wait-and-watch mode; unsurprisingly, new supply in this category reduced markedly.
The first half of FY23 was a highly upbeat period for the residential market in the top 7 cities, allying fears that housing sales could be impacted by rising property prices and interest rates. The numbers show that Diwali came early for developers, with homes worth INR 1.56 lakh Crore sold across the top 7 cities in H1 FY23.
Reviewing the overall performance of the Indian residential real estate market in 2021 shows a definite upswing. Between Jan - Sep 2021, 1.63 lakh units of new residential supply were added across the top 7 Indian cities - 27% higher than 2020 full year supply - and 1.45 lakh units were sold - 5% higher than in the whole of 2020.
Predictably, the secondary sales or resale housing market proved far more vulnerable to demonetization than the primary market. This segment, along with luxury housing, historically drew the bulk of 'cash components'.