The affordable housing sector has recorded a surge of 27 per cent in new units launched (y-o-y) post announcements by the government to incentivise affordable housing through industry status, many developers have shown interest in developing such projects, a Cushman & Wakefield said.

However, overall residential unit launches recorded a decline of 33 per cent and was at approximately 60,000 units in the first three quarters of 2017 (January-September).

All cities, except for Mumbai, saw a decline in new launches, mostly due to the introduction of Real Estate Regulatory Act (RERA) and GST implementation.

Further, the first quarter of the year had the rollover challenges of demonetisation (November 2016) to grapple with leaving many developers no choice but to defer their launch plans.

The affordable housing segment demonstrated strongest trends to record a 27 per cent increase in the new units launched in these cities.

More than 26,000 new units have been launched this year. Of the total new launches in affordable units, 40 per cent were in Mumbai (10,500 units) followed by Kolkata and Pune. All other categories have seen a decline with high-end (-66 per cent) and luxury (-84 per cent) segments witnessing a significant drop in new launches.

“Affordable housing is an attractive proposition both for developers and consumers as the demand is huge and largely unmet. The high focus of the central government has resulted in the availability of more funding options for the developers such as ECB, FDI and debt financing from national financial institutions at highly competitive rates. However, there are challenges for affordable housing projects in tier 1 cities, where land costs and availability within established locations is very difficult, “ said Anshul Jain, MD, India Cushman & Wakefield.

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