Real estate trends: Report shows share of affordable homes under Rs 50 lakh falls from 48% to 15% in Delhi-NCR; experts see notable shift in pattern

In the unfolding narrative of India's real estate sector, the first quarter of 2024 has emerged as a tale of contrasting fortunes.Industry figures show that while the overall housing sales surged by an impressive 41 per cent across the top eight cities, they say that a sobering reality lurks beneath the surface. 

Data from housing brokerage firm PropTiger.com reveals a concerning trend: the dwindling availability of affordable homes priced up to Rs 45 lakh. Amidst the surge in housing transactions, the dream of homeownership is slipping out of reach for many middle-class and lower-middle-class families in prominent regions like Delhi NCR. The once-accessible locales of Gurgaon, Noida, and Delhi now present formidable barriers to entry, leaving prospective buyers grappling with affordability challenges.

The share of affordable homes in total housing sales was at 48 per cent in the January-March period last year. Homes priced below Rs 50 lakh now comprise only 15 per cent of the overall residential real estate market in India after taking a hit during the pandemic. 

The past two years have seen the share of affordable homes sliding from 27 per cent in Q1, 2022 to 15 per cent in Q1, 2024 — the lowest market share for affordable homes in years, according to JLL. 

“There have been notable shifts in the sales distribution across different segments of the residential market. In the luxury segment, which comprises apartments priced at Rs 3 crore and above, the share of quarterly sales has witnessed a significant increase, rising from 5 per cent in Q1 2022 to 11 per cent in Q1 2024. In contrast, the affordable segment, encompassing apartments priced below Rs 50 lakh, has experienced a decline in its share of sales,” says Siva Krishnan, Senior Managing Director - Chennai & Coimbatore, and Head - Residential Services, India, JLL.

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Experts predict that this decline in affordable home sales is primarily due to the non-availability of quality homes in affordable homes. However, there are certain regions like Bhiwadi, a notable outlier in the National Capital Region (NCR) that still offer homes within the reach of middle-class homebuyers. Despite the broader trend of escalating prices, Bhiwadi defiantly retains its status as an enclave of affordability, providing hope for those still aspiring to own a home within their means. With 2BHK apartments priced under Rs 50 lakh and villas under Rs 1 crore, Bhiwadi provides a complete package of affordable and luxury homes, making homeownership dreams a reality for many.

Commenting on this Shashank Vashishtha, Executive Director, Exp Realty India - a global brokerage firm, said, “Bhiwadi is emerging as a key player in guiding new urban developments and investments in the NCR real estate market. This represents an ideal time for investors and homeowners to engage in this significant growth phase, blending affordability with quality of life. This region is one of the few that still offers affordable homes for middle-class homebuyers across NCR.”

Experts say that apart from affordability, Bhiwadi’s allure is further heightened by its robust infrastructure development, strategic location, and excellent connectivity, all of which contribute to making it a top choice for homebuyers seeking affordable housing within a well-developed ecosystem. Realtors say that due to its prime location, Bhiwadi benefits from a network of well-established infrastructure, paving the way for both commercial and residential projects to thrive.

Key initiatives such as the Delhi-Mumbai Industrial Corridor (DMIC) and the ongoing expansion of the Regional Rapid Transit System (RRTS) exemplify the concerted efforts towards enhancing connectivity and catalyzing economic growth in the region, they added.

As the disparity between housing supply and demand widens, policymakers, developers, and stakeholders alike are confronted with the urgent task of addressing the affordability crisis. The narrative of Q1 2024 serves as a poignant reminder of the critical need for concerted efforts to safeguard the dreams of homeownership for all segments of society, ensuring that the promise of a home remains within reach for generations to come.

The PropTiger.com report serves as a stark reminder of the widening gap between housing supply and demand in India's top cities. As the dream of homeownership becomes increasingly elusive for many, urgent action is needed to address the affordability crisis and safeguard the aspirations of millions of middle-class and lower-middle-class families across the country.