E-Paper
Coronavirus could upset growth momentum of affordable housing: Report
Gurugram: The Covid-19 pandemic is likely to upset the growth momentum of affordable housing in 2020. This segment is likely to be among the worst affected as income
Gurugram: The Covid-19 pandemic is likely to upset the growth momentum of affordable housing in 2020. This segment is likely to be among the worst affected as income growth and job security are going to be hit across most sectors due to the coronavirus pandemic, says a report by a private consultancy released Wednesday.
According to the report, there are 6.1 lakh affordable residential units under construction in top seven cities of the country, of which 59% are in the National Capital Region (NCR) and the Mumbai Metropolitan Region (MMR) alone, the report by consultancy firm Anarock says.
The rules of the central government state that an affordable house is one which is up to 90 square metre (sqm) in size in non-metropolitan cities and 60 sqm in metropolitan cities, having a value of not more than Rs 45 lakh.
The report added that NCR and MMR alone account for nearly 59% - or 3.59 lakh - such units and these were primarily launched between 2013 and 2019. Both regions together also have a 57% share (approximately 1.34 lakh units) of the overall unsold stock of 2.34 lakh units in the budget homes category, which is another burden.
“This segment will be severely impacted by the Sars-Cov-2 outbreak. The target audience typically has limited income and unemployment fears currently loom large. This could result in deferred property purchase decisions in 2020 and ultimately derail the segments’ growth momentum. As a result, unsold affordable stock can rise by 1-2% on a year-on-year basis,” said Anuj Puri, chairman Anarock property consultant.
Despite the findings of the report, developers and real estate consultants in Gurugram say the affordable segment in the city is not likely to see much upheaval as a majority of the projects in the city are either under Rs 30 lakh per unit or the price is beyond Rs 70 lakh per unit. “The affordable projects this report mentions are those priced between Rs 30-40 lakh and Gurugram has very few of such projects,” said Pankaj Tomar, a real estate broker, adding that affordable housing in Haryana was controlled by the Department of Town and Country Planning and were limited in Gurugram because such projects were more in other cities.
They admitted that Covid-19 will no doubt impact the entire real estate sector but housing projects under affordable housing policy are not likely to be impacted much in the city.
“As far as Haryana is concerned, it would not be right to say that Covid-19 will derail the affordable housing growth in 2020. We are working as per the Haryana Affordable Housing Policy and the demand for these houses is a lot here. In fact, the supply has not met the demand as yet. There are around 75 projects in this segment with 55,659 units and the price per unit is under Rs 30 lakh. However, the post-Covid-19 period will be a challenging one wherein affordable housing would need a push from the government,” Pradeep Agarwal, chairman, Signature Global, a city-based developer.
A city-based developer engaged in affordable projects said that unlike other areas, the DTCP had ensured that labourers at construction sites do not migrate from the sites. “We are taking care of this labour force and in hindsight this cost is going to be beneficial for us mobilise labour again would have considerably delayed projects,” said a senior executive, who preferred anonymity.
As per the details shared by the report, NCR has the maximum under-construction affordable housing stock with more than 1.87 lakh units. MMR has 1.72 lakh affordable units under construction, Pune has 1.31 lakh such units, Kolkata has 55,300 such units, Bangalore has 32,300 units, Chennai has 19,500 affordable units, while Hyderabad has 11,000 affordable units that are under construction.
