COVID-19 derails affordable housing growth, 6.1 lakh units impacted in top 7 cities

The COVID-19 pandemic is all set to derail the growth momentum of affordable housing in 2020, according to a new report by property brokerage firm Anarock.

This will be one of the worst-affected segments. Nearly 6.1 lakh affordable units were under construction across the top seven cities until the lockdown was announced.

This is over 39 per cent of the total 15.62 lakh under-construction units in the top seven cities -- the higher share of all budget categories.

While the report estimates overall unsold housing inventory to shrink annually by one to three per cent this year, the unsold affordable stock may actually increase by one to two per cent in this period.

As on Q1 2020 end, there are more than 2.34 lakh unsold affordable homes in the top seven cities -- 36 per cent of the total unsold stock across all budget categories.

"The government's 'Housing for All' push coupled with multiple sops to buyers and developers brought an avalanche of affordable housing projects in India," said Anuj Puri, Chairman of Anarock Property Consultants.

"As much as 40 per cent of the new supply added across the top seven cities in the past few years was in the affordable segment (units priced at less than Rs 40 lakh each). Resultantly, there is a huge under-construction supply of about 6.1 lakh units in the affordable segment."

Puri said this segment will be severely impacted by the current COVID-19 outbreak. The target audience typically has limited income and unemployment fears currently loom large.

"This can result in deferred property purchase decisions in 2020 and ultimately derail the segment's growth momentum. As a result, unsold affordable stock can rise by one to two per cent on a year-on-year basis."

The National Capital Region (NCR) has the maximum under-construction affordable housing stock with more than 1.87 lakh units. Unsold stock in this budget category is nearly 64,430 units in NCR.

The Mumbai Metropolitan Region (MMR) is next with nearly 1.72 lakh affordable units under construction. The unsold affordable stock as on March 2020-end is 68,970 units.

( With inputs from ANI )