Demand for luxury homes boom, but affordable housing weakens

But pandemic is not the only reason that derailed the growth of affordable housing. With soaring land deals, the cost of this basic input for all real estate has spiralled in tandem. "It is becoming increasingly unviable for developers to buy land at higher prices to build low-margin mass housing. Other input costs have also risen inexorably in the last few years" says Anuj Puri, Chairman - ANAROCK Group.

The total new supply share in the affordable category across the top 7 cities has declined. Of about 2 lakh units launched in January to June 2023, nearly 39,000 were in the affordable housing category.

As for affordable housing buyers, a majority are seen postponing purchase decisions due to rising real estate prices over the last one year. Lack of sound support infrastructure in the distant suburbs and the conspicuous absence of contemporary low-cost construction techniques are additional challenges for this segment.

Real estate stocks have witnessed an unprecedented move in past one year. The Nifty Realty index surged 23 percent in past one year. Stocks like DLF, Phoenix, Brigade Enterprises, Prestige Estates have had a phenomenal run in same period. On July 24, the real estate pack is trading in the green.

Housing Finance players like Can Fin Homes is 6 percent higher, while Aptus Value Housing Finance India is up 2 percent.