Once showcased as a flagship in the Centre’s push for ‘Housing for All’, India’s affordable housing sales are witnessing one of its steepest fall in recent times. Homes priced in the ₹60-75 lakh price bracket has seen a supply as well as sales dip of at least 35-40 per cent over the last 18-odd months; and developers have also shied away from announcing projects in these price brackets or have moved on to more premium projects priced Rs 1 crore and above.

Big ticket developers like Signature Global - who initially focussed on the affordable plank – have slowed down on category launches; and other developers are focusing on high margin - of 40-50 per cent – ones.

Premium realtor, Prestige Estates Project too has reportedly gone slow on its JV with HDFC Capital Adivisors that aimed at focussing up affordable housing projects.

Multiple factors like circle rates going up (land price increase), non-availability of interest subsidy under PMAY, overall rise in construction costs, and low margins have contributed for the fall in affordable home sale, Niranjan Hiranandani, Chairman, NAREDCO, told businessline.

“Post pandemic the sale of affordable housing has slowed down. Whatever growth in real estate sales is because of mid segment projects (two bedrooms), premium, super premium and luxury ones,” he said. This also formed the crux of his pre-Budget meeting with the FM, Nirmala Sitharaman.

The government defines ‘affordable housing’ as homes with a carpet area of up to 60 sq.metres. A house must cost no more than ₹45 lakh. Affordable housing projects must utilise at least 60 per cent of the available space. Also, 35 per cent of the total number of houses developed in such projects should be 21-27 sqm carpet area.

As per market intelligence firm, PropEquity, affordable and mid-income category homes (priced Rs 1 crore and below) has dipped by 36 per cent in the last two years, from 3,10,216 units in 2022 to 1,98,926 units in 2024 with NCR, Mumbai and Hyderabad as worst performers.

The housing supply in the affordable and mid-income category stood at 2,83,323 units in 2023, a drop of 30 per cent in one year, it said. In case of Hyderabad and Mumbai, supplies fell by over 60 per cent.

Similarly, ANAROCK data showed sales share of affordable housing fell to 18 per cent in 2024 from over 38 per cent in 2019. Similarly, the share of total housing supply in the top seven cities dropped to 16 per cent in 2024 from nearly 40 per cent in 2019.

According to Anuj Puri, Chairman – ANAROCK Group, homes priced under Rs 40 lakh has struggled post-pandemic. “A critical issue remains the lack of urban land,” he said while pitching for restoring a100 per cent tax holiday for developers to enable them to reconsider affordable housing projects.

For the real estate sector, 2024 saw a slowdown in real estate with housing sales in the top seven cities declining by 4 per cent to approximately 4.46 lakh units and new launches dropping by 7 per cent to around 4.13 lakh units.

According to Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd, addressing the housing needs of the common man by focusing on affordable and mid-income housing in Delhi-NCR is one of the “core objectives” of hsi company.

“However, the biggest challenge today is soaring land prices over the last two-odd year and rising construction costs, have made launching affordable housing projects increasingly unviable,” he said while pitching for a redefinition of the affordable housing definition to include properties priced up to ₹1 crore.

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