The latest report on residential market released by real estate consultancy Cushman & Wakefield, reveals that the affordable housing sector has seen a massive surge of close to 100% (double) in new launches in the first half of 2016 (H1 2016), as against same time last year. The total number of affordable housing units launched in H1 2016, in the top eight cites were recorded at over 17,000 units; while the total units launched in these location was recorded at 60,000 in H1 2016 registering an increase of approximately 17% year –on- year (y-o-y). In terms of volume however, mid – ranged housing saw the highest number of launches at 36,267 units in key market recording 10% increase in H1 2016 as compared to same time last year. High- end residential units saw a decline in the total number of units launched in the H1 2016 period which was lower by 29 % in the period.
Anshul Jain, Managing Director, India, Cushman & Wakefield said, “The rise in the launch of affordable segment can be attributed to a steady demand for this segment of housing in key cities of Bangalore, Delhi – NCR and Mumbai. This is heartening to see that demand for this segment which was neglected for a very long time, is now being catered to as this formed a very large segment of latent demand. The uptake of affordable segment in the market, will have a cascading impact on the overall economy at large.”
Continuing further, Anshul Jain said, “Going forward, we expect to see more projects in the affordable segment to come up given that there is a cost benefit in creating these units. The time taken from ground breaking to completion is lower than that for the mid or high end apartments. Additionally, sales can happen a lot faster thus helping developers realise their costs earlier than usual. Further with the government defining the affordable space as 30 sqm in tier 1 and 60 sqm in tier II and announcement of benefits for development of such apartments, we expect this segment of residential housing to grow.”
BENGALURU SAW THE HIGHEST LAUNCHES IN AFFORDABLE SEGMENT BUT ALSO SAW RISE IN AVERAGE COST FOR AFFORDABLE BY 14% Y-O-Y
Bangalore saw a total launch of 11,000 units in the first half of the year which was 30% higher than same time last year. The affordable segment which saw over 4000 units in H1 2016 recorded an increase to 1700%. Majority of the launches were in South cardinal in locations of of Sarjapur Road, Electronic City, Bomasandra & Harlur with nearly 60%. The average size of the units have risen by 10% while the average cost of units have seen a growth of 14% amounting to an average increase of ticket size from approximately INR 35,00,000/- in H1 2015 to INR 44,00,000/- in H1 2016.
The total number of units launched in the first half of the year was estimated at over 4000 units of launches in the affordable segment which was nearly double that which was launched in H1 2015. Larger concentration of launches in the affordable segment were in locations of Wagholi and in Pimpri (Talegaon) both amounting about 45% of the total launches in this segment. Average ticket size has gone up from INR 23, 00,000/- in H1 2015 to approximately INR 31,00,000/- in H1 2016. This comes at the back of an increase in the average size of units in the affordable segment which are now 22% larger than their year ago predecessors as well as some hike in launch prices which saw an increase of 11% in the same period of time.
NCR SAW LAUNCHES CLOSE TO 3000 UNITS IN AFFORDABLE SEGMENT, TICKET SIZE REDUCES BY NEARLY 16%
Delhi – NCR recorded a total of 3000 (apprx.) units in affordable segment which was lower by 44% as compared to the launches in the same time last year. Of the total launches over 70% were in Gurgaon in the region of Sohna that will see the advent of approximately 2100 units in the next 3- 5 years. The rest of the launches were in the locations of NOIDA Expressway and Greater NOIDA West. The average launch price of Delhi - NCR saw a decline of 19% y-o-y in H1 2016 while the average unit size saw a very marginal improvement of 5% in the same period of time. The average ticket size for new launches in the affordable segment was therefore recorded at INR 31,00,000/- while the same was INR 37,00,000/- in H1 2015 demonstrating a drop of about 16% in ticket size in Delhi NCR.
UNITS OF AFFORDABLE SEGMENT IN MUMBAI GET SMALLER BY 7%, BUT SEE RISE OF 10% IN AVG. CAPITAL VALUES
Mumbai saw an increase in average capital values in affordable segment by approximately 10% in H1 2016 as against H1 2015, while in the same time the average unit size in affordable segment saw a decline of 7%. This has therefore resulted in a marginal change in ticket size of an increase of 2% for the newly launched e housing. Mumbai saw a y – o – y rise of 56% in the number of units launched affordable segment in H1 2016 as against same time last year with Ambernath and Thane recording close to 50% of these launches. The other locations that saw new project announcements include Taloja and Panvel in Navi Mumbai and Mira Road in the Western Suburbs.
In order to de-congest the city, Mumbai needs to create a very large stock of housing However due to high land costs and higher construction cost within the city, many developers are unable to cater to this need. Therefore Mid ranged segment (INR 50 lakhs – 2 Crores) segment is likely to witness a higher concentration of new launches Even while there is a clear understanding that this segment is still under serviced, stringent regulations, higher interest on borrowed capital and high land cost are all deterring developers to take up housing projects in affordable segment within the city. The government primarily has to take initiatives to unlock land that are still under government control and additionally create a very robust redevelopment plan to unlock land which is currently under slum habitation and illegal occupancy.
CHENNAI & HYDERABAD SAW LIMITED ACTIVITIES IN THE AFFORDABLE HOUSING SEGMENT
Hyderabad, which has been on a resurgence so far as the office market is concerned did not see any significant launches in the affordable segment. The total launches were mere 109 units spread across two separate developments in Manikonda and Gajularamaram regions. At the same time, Chennai did not see any launches in the affordable segment.
KOLKATA & AHMEDABAD
Kolkata saw the launch of 2000 units in the affordable segment in the first half of 2016 majority of which was in Rajarhat followed by Pailan in the southern peripheral. There was also a rise of 9% in ticket size of the units launched in this segment in H1 2016 as against those launched in H1 2015. While the average unit size in affordable segment declined by 5% y-o-y there was an increase in average capital values of the launched units by approximately 14% in the same period of time.
Ahmedabad saw the launch of approximately 2,445 units in affordable segment, which was at an average capital value of INR 2,234/- pegging the ticket price of INR 21,00,000 /- per unit. Highest number of units were launched in the region of Moraiya, followed by S.P. Ring Road and South Bhopal.
Read more about other cities in Q2 Residential Marketbeat
 Delhi – NCR, Mumbai, Bangalore, Chennai, Hyderabad, Pune, Kolkata, Ahmedabad
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