The Indian housing market has undergone significant changes post-COVID-19, with affordable housing demand declining sharply. The ANAROCK-FICCI H1 2024 survey reveals 53% buyer dissatisfaction with affordable options, while affordable housing supply dropped from 40% in 2019 to 17% in 2024. Buyer preferences have shifted toward premium properties, with 45% now seeking homes above INR 90 lakh. Ready-to-move-in versus new launch preferences have reversed from 46:18 to 20:25. Investment focus has turned to rental income, driven by 70% rental rate increases. Regional variations show Southern cities preferring plots and villas, while MMR, NCR, and Pune favour apartments.
The affordable housing sector in India has experienced a significant transformation since the COVID-19 pandemic. While initial decline was attributed to financial constraints among target buyers, recent findings from the ANAROCK-FICCI Homebuyer Sentiment Survey (H1 2024) reveal deeper issues, with 53% of potential buyers expressing dissatisfaction with available options across cities.
This declining interest has directly impacted new affordable housing development. ANAROCK data shows that affordable housing's share in new launches has drastically reduced from 40% in pre-pandemic 2019 to 26% in 2021, further dropping to just 17% by the first nine months of 2024.
A notable shift has occurred in buyers' preferences regarding construction stages. The ratio of demand between ready-to-move-in homes and new launches has shifted from 46:18 in H1 2020 to 20:25 in H1 2024.
This change reflects increased confidence in large, listed developers who have proven track records of timely delivery. The investment landscape in residential real estate has also evolved, with 57% of investors now prioritizing rental income. This trend aligns with the substantial increase in rental rates across cities over the past two years, with some prime locations seeing over 70% growth.
Premium and luxury segments have gained significant traction, with 45% of survey respondents showing interest in properties priced above INR 90 lakh, a substantial increase from 27% in pre-Covid 2019. This indicates a clear shift away from affordable housing toward higher-end properties.
The survey also highlights growing interest in residential plots, with 20% of property seekers considering them as viable options. This trend is particularly strong in Southern cities, with Chennai (30%), Bengaluru (29%), and Hyderabad (27%) showing the highest preference for plots. Major developers have responded by launching numerous plot projects in these regions, finding ready buyers.
Regional preferences vary significantly, with Southern cities showing strong interest in villas and row houses, while over 70% of buyers in Mumbai Metropolitan Region (MMR), National Capital Region (NCR), and Pune prefer traditional apartments. These distinct regional preferences reflect diverse market dynamics across India's major urban centers.
The affordable housing sector in India has faced significant challenges post-COVID-19, with declining interest and a shift towards premium properties. The share of affordable housing in new launches has decreased sharply, while demand for ready-to-move homes and rental income investments has increased. Regional preferences also vary, with Southern cities favoring residential plots and villas, contrasting with the apartment preference in major urban areas.
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