- As of Q1 2022-end, the total available stock of affordable housing (<INR 40 lakh) in the top 7 cities is approx. 1,86,150 units; 2,34,600 units at Q1 2020-end
- Chennai, Pune & MMR saw the highest supply decline of 52%, 33% & 27%, respectively
- Supply of ultra-luxury homes (>INR 2.5 Cr) declined 5% in the same period – from approx. 41,750 units in Q1 2020-end to approx. 39,810 units by Q1 2022-end; MMR & Kolkata shed maximum ultra-luxury stock of 16% & 15%, respectively
- Mid segment housing saw a 4% decline – from 1,97,880 units in Q1 2020-end to 1,89,310 units by Q1 2022-end
- Premium & luxury homes (INR 80 lakh to INR 2.5 Cr) unsold stock increased in the same period
Mumbai, 19 April 2022: While the new supply of affordable housing has been shrinking over the last two pandemic years, demand remains healthy. ANAROCK data reveals that out of the total unsold stock across the top 7 cities, affordable housing inventory saw the most significant decline of 21% – from 2,34,600 units by Q1 2020-end to 1,86,150 units by Q1 2022-end.
Anuj Puri, Chairman – ANAROCK Property Consultants
The hard facts of declining consumption and a deepening economic slowdown in India are inescapable, and real estate has been severely impacted by them. To this gloomy backdrop, the RBI’s repo rate cut of 35 bps to 5.4% announced in the latest monetary policy is obviously welcome.
This rate cut, the fourth consecutive cut since February 2019, is meant to boost consumer sentiments once commercial banks transmit the benefits to actual consumers.
For real estate, a rate cut of 35 bps is however insufficient to significantly improve buyer sentiment in the mid-income segment, which still has a staggering unsold inventory of 2.17 lakh units in the top seven cities. On the other hand, demand for affordable housing, which accounted for 2.40 lakh unsold units in these cities, may see improvement as this highly budget-sensitive segment already has the benefit of other incentives.
Even minor downward revisions in interest rates can and do make a difference in affordable housing. If banks transmit this reduction in the prime lending rate to consumers, budget housing demand may improve. Likewise, housing demand in tier 2 and tier 3 cities,