Real estate developers seem to go with the flow. While property markets across the country are sluggish, the number of launches in affordable housing has doubled in the first half (H1) of 2016 on a yearly basis.
At the high end, housing launches declined by 29 per cent as compared to same time last year, says a Cushman & Wakefield report.
The top eight cities saw launches of 17,000 units in H1 in the affordable segment, a rise of 95 per cent over the same period last year, said the report. The highest was in Pune at 4,170 units, followed closely by Bengaluru at 4,155.
The total of launches across all segments was 60,000 units, an increase of 17 per cent over a year. Mid-level housing saw launches of 36,267 units, a tenth higher than H1 of 2015. High-end residential units saw a 29 per cent decline.
According to the consultancy, Rs 20-25 lakh is considered affordable in top cities, except Mumbai, where it is up to Rs 70 lakh. Between Rs 50 lakh andRs 1 crore is considered mid-range in other cities; in Mumbai, between Rs 70 lakh and Rs 2 crore. Anything between Rs 1 crore and Rs 2.5 crore is considered high-end elsewhere; in Mumbai, between Rs 2 crore and Rs 5 crore.
Mumbai saw the highest number of total launches in H1, with a little over 12,000 units added to the stock across categories. Next was Bengaluru with 11,000.
Chennai saw the least number of unit launches in H1, owing to a slowdown in construction activities in the city.
Anshul Jain, country managing director at Cushman & Wakefield, said: “The rise in the launch of affordable housing can be attributed to a steady demand for this segment in Bengaluru, Delhi–NCR and Mumbai. This is heartening to see that demand for this segment, neglected for a very long time, is now being catered to. This formed a very large segment of latent demand.”
He said Cushman expected more of affordable housing projects to come up, as there is a cost-benefit in creating these.
“The time taken from ground breaking to completion is lower than for mid or high-end apartments. Also, sales can happen a lot faster, helping developers realise their costs earlier than usual,” he said. “Further, with the government defining the affordable space as 30 sq metres in Tier-1 and 60 sq metres in tier-II cities, and announcement of benefits for development of such apartments, we expect this segment of residential housing to grow.”
The mid-segment remained a favourite among developers across cities. Mumbai saw a 100 per cent increase in H1 and of 56 per cent in affordable units, as against the same time last year, with Ambernath in Thane recording close to half of these.
The other locations that saw new project announcements there were Taloja and Panvel in Navi Mumbai and Mira Road in the western suburbs. The highe end segment saw a 53 per cent decline (1,130 units), while no launches were recorded in the luxury segment.