A SURVEY conducted by Knight Frank India has shown that houses across the country have become more affordable since 2010. This has been attributed to the implementation of the Real Estate Regulatory Act (RERA) and increasing demand from homebuyers, forcing developers to shift from the luxury to the affordable housing sector.
The survey evaluated the top eight markets of India, including Mumbai, and noted that in other cities — including the National Capital Region and the IT hubs of Bengaluru and Hyderabad — also, there has been an improvement in demand for affordable housing.
As per the survey report, there is a decline in the average size of residential units, contributing to growing affordability in the market.
Real estate markets in Mumbai (-25 per cent), Pune (-24 per cent) and Bengaluru (-18 per cent) have seen a sharp reduction in the average size of homes since 2010 while Hyderabad (+4 per cent) and Ahmedabad (+7 per cent) are the only two markets offering larger homes. With annual sales reducing across all major markets, the shift towards making homes more affordable is visible, the report stated.
Annual apartment sales peaked in 2011 and since reduced consistently till 2017. This pushed up the unsold inventory forcing developers to restrategise, especially over the past two years, to entice buyers and move inventory. The establishment of the RERA has further accentuated the need to stick to construction timelines and compelled developers to reduce prices to push sales, the report stated.
Shishir Baijal, chairman and managing director of Knight Frank India said: “Housing is one of the most persistent challenges faced by urban centres today. India, which is also faced with these challenges, however, is witnessing a gradual improvement.
A decline in average ticket size and focus on affordable housing have improved home affordability across the country to a large extent. The fact that affordability statistics have moved dramatically since 2010 explains why sales have improved in 2018.”
He added, “With a focus on creating housing for all by 2022 and to bring back the real demand for housing, improving affordability will be imperative. We can expect further strengthening of affordability in the near future as more affordable and mid-range projects are undertaken.”