In the first half of 2023, the affordable housing segment in the top seven Indian cities faced an 11% decline in sales compared to the first half of 2022. However, the Mumbai Metropolitan Region (MMR) and Pune have emerged as the leading markets for affordable homes.
These two cities accounted for the highest sales of cheap homes. MMR represented 37%, with Pune following closely with 21% of all affordable homes sold among the top seven cities.
Moreover, among the top seven cities, the National Capital Region (NCR) followed the lead of MMR and Pune, contributing 19% to the total affordable homes sold in H1 2023, with 8,680 units sold.
On a broader scale, the total number of affordable homes sold in the top seven cities during the first half of 2023 amounted to approximately 46,650 units, out of a total of 2.29 lakh units sold. In contrast, H1 2022 witnessed 57,060 affordable homes sold out of 1.84 lakh units. This indicates a drop in the demand for affordable housing.
Buyers and developers have also faced challenges. The rising prices of essential components, such as land and other inputs, have made it difficult for affordable housing projects to maintain their lower prices. Additionally, the lack of modern, low-cost construction methods and reliable support infrastructure in suburbs has posed additional difficulties for developers.
As a result, many potential affordable housing buyers have been forced to delay their purchase decisions. This has impacted the sales share of affordable homes from all the homes in all the top 7 cities, which fell to approximately 20% in H1 2023, down from 31% in H1 2022.
Moreover, developers have shifted their focus to mid-range, premium, and luxury projects that experience higher demand. The share of new supply for affordable homes in the top seven cities decreased from 23% in H1 2022 to 18% in H1 2023.
On the other end of the spectrum, Hyderabad witnessed the fewest affordable housing sales, with only 720 units, comprising a mere 2% of all sales in the top 7 cities.
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