According to PropTiger.com’s data, two-bedroom apartments costing up to Rs 45 lakh account for about half of the entire housing demand in India’s primary residential market across eight major cities. Around 26% of all property purchases were in the range of Rs 45-75 lakhs, with 2 BHK configurations accounting for 44% of total demand. Another report by Anarock says that Delhi-NCR accounted for over 38% of overall affordable housing demand in the country, with Gurugram accounting for 32% of total demand in the Delhi-NCR region.
“Gurugram’s economic boom over the previous few decades has resulted in faster urbanisation and a surge in the number of migrant workers flocking to the city seeking work. Fast-paced development in locations like MG Road and Cyber City caused a ripple effect, pushing development to Gurugram’s other reaches, resulting in the emergence of new areas,” says Rajat Goel, JMD, MRG World.
According to research, new supply increased by 49% year over year to 53,037 units across eight locations in the first quarter of 2021. New supply is still concentrated in the sub-Rs 45 lakh segment, which accounts for 45 per cent of the total pie. In the first quarter, the mid-segment (price range of Rs 45–75 lakh) accounted for 27% of total supply. “Since a few years, the affordable housing category has been a strong performer. To promote demand in this category and fulfill its goal of Housing for All, the government is providing tax advantages and interest subsidies,” adds Goel.
With improved demand and supply in the affordable housing market, the real estate sector in Delhi-NCR is gaining traction. Affordable housing, defined as units costing less than Rs 45 lakh, has seen the strongest demand since the pandemic reached the country, according to a survey by property consultant Anarock. Affordable housing contributed for 40% of demand in 2020, up from 31% in pre-Covid-19 – a 9% increase.
“Despite the fact that there is still a long way to go, the worst is over in the real estate market. In actuality, the obstacles that residential real estate endured in 2020 will help the sector expand in the long run. In the New Normal, only customer-centric developers with a track record of providing high-quality products will be able to thrive. Furthermore, demand continues to be driven by end-users,” says Goel.
Though markets slowed down after the second wave, Goel says, “The government’s repo rate cuts resulted in reduced home loan rates, which are working in favor of affordable housing. The developer community also devised tempting payment plans to avoid an abrupt drop in sentiment. It is a temporary phase, and the markets will bounce back faster compared to last year.”