Real Estate: After the Corona epidemic, the country’s real estate market is back on track, but its direction has changed. While earlier there was good demand for cheap and mid-segment homes, now the dominance of premium and upper-mid segments seems to be increasing in the market. Flats worth crores of rupees are being launched in big cities, while affordable housing projects are decreasing. The question is why is housing becoming inaccessible to the common buyer?
Increasing shine of premium segment
At present, the demand for premium and upper-mid segments in the real estate market remains stable. Buyers in this category are generally less dependent on bank loans and are not much affected by fluctuations in interest rates. Better location, modern facilities and lifestyle upgrade are their priority. Developers are also now focusing on price per unit more than the number of sales. This means that the strategy of earning more by selling less flats is being adopted.
Sales of cheap and mid-market houses slow
There has been a decline in the sales of cheap and mid-segment homes after Covid. Inflation, rising interest rates and rising construction costs have made buyers in this category wary. First-time home buyers are now more cautious about their budget and are postponing the purchase decision. However, the continuous increase in rents makes it clear that the need for affordable housing has not ended. The demand is there, but the supply is becoming limited.
Why are affordable projects not coming?
Developers say that land prices have increased rapidly from metros to small towns. Also, the cost of construction material has increased by about 60 percent in the last three years. In such a situation, building low-cost houses has become economically challenging. The government has fixed the definition of affordable housing, but due to lack of relief on land and cost, it is becoming difficult for private developers to launch projects in this segment.
Will the trend change in future?
Experts believe that unless common buyers return to the market in large numbers, real estate growth will remain incomplete.
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