The changing mood of real estate… Huge demand for premium flats, why is affordable housing disappearing?

Shifting Trends In Real Estate: After the Corona epidemic, the Indian real estate market has completely changed its direction and now premium projects are dominating. Flats worth crores of rupees are now being launched in big cities while buying a house is becoming a dream for the common man. In this era of changing trends in real estate, developers are now focusing more on profit per unit rather than the number of sales. Experts believe that due to the huge increase in construction costs, the supply of cheap houses is continuously decreasing in the market.

Dominance of premium segment

The demand for premium and upper-mid segments in the real estate market currently remains very stable, which is encouraging developers. Buyers in this category are less dependent on bank loans and changes in interest rates do not have any significant impact on them. Better location and modern facilities have now become the priority of the customers, due to which the sales of expensive houses have increased.

Slow sales of cheap homes

After Covid, there has been a huge decline in the sales of cheap and mid-segment homes due to which the common buyer is away from the market. Inflation and surge in construction costs have made middle class buyers completely wary and cautious about investments. First-time home buyers are now postponing their decisions due to budget constraints while rents continue to rise.

huge increase in costs

Developers say that from metros to small towns, land prices have increased rapidly in the last few years. There has been a huge jump in the cost of construction materials by about 60 percent in the last three years, which is worrying. In such a situation, building low-cost houses is now proving to be financially challenging and a loss-making deal for builders.

New strategy of builders

Developers are now focusing on price per unit instead of selling more units so that they can make profits even in small sales. With the increasing demand for ultra-luxury apartments worth crores, builders are now taking more interest in launching only premium projects. Big housing deals of Rs 380 crore in areas like Delhi-NCR are a big proof of its changing market.

Challenges of Affordable Housing

The government has fixed the definition of affordable housing but till now no major relief has been received on land and cost. It is becoming difficult for private developers to bring new projects in this segment as the profit margin has reduced significantly. Unless costs come down, purchasing a home will remain a huge challenge for the average buyer.

Possible future trend

Experts believe that unless common buyers return to the market, the real growth of real estate will be considered incomplete. If the government provides land at concessional rates, new life can be breathed into this stagnant segment. It is also the need of the hour to change the definition of affordable housing so that the middle class can get the luxury of home.

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Market needs stability

For the strength of the real estate sector, it is very important for the economy for every category of buyers to be active in the market. It will be difficult to go a long way in the market relying only on the premium segment because the mid-segment is the main base of volume. In future, only coordination between the government and developers can find a permanent and positive solution to this problem.

Changing investment options

At present, investors are also looking for those projects where there are better facilities and possibility of good returns in future. The glitter of luxury homes has attracted the attention of investors due to which investment in affordable housing has reduced significantly. This new market trend will continue to influence the direction and condition of real estate for years to come.