PropEquity report: Affordable homes under Rs 1 crore hit hard by supply shortage

Fresh supply of affordable and mid-income homes costing up to Rs 1 crore fell 30 per cent last year to nearly 1.99 lakh units across nine major cities, according to PropEquity.

Housing Crisis Alert

Real estate data analytics firm PropEquity on Tuesday pointed out that India's top nine cities, where a majority of Indians migrate for jobs, are "staring at a housing crisis". PropEquity attributed this fall in new supply of affordable and mid-income homes to a shift in developers' focus towards luxury housing.
The supply of homes in the affordable and mid-income category (priced Rs 1 crore and below) across nine cities has dipped to 1,98,926 units in 2024 from 2,83,323 units in the preceding year. The supply was 3,10,216 units in 2022.

Population Growth in Tier-1 Cities

"Today, 8 per cent of India's population live in tier-1 cities and this number is expected to grow exponentially in the next five years as more people move to these cities for employment opportunities," Samir Jasuja, Founder and CEO of PropEquity, said. The lack of supply in this category, if not attended to in time by the government, will lead to a housing crisis akin to Australia and Canada, he added.

Future Housing Demand Estimates

"In view of rising migration and a growing number of nuclear families, it is estimated that 1.5 crore homes would be required in these cities in the next 5 years," Jasuja said. Among nine cities, the fresh supply of homes costing up to Rs 1 crore slipped 11 per cent in Bengaluru to 25,012 units during 2024 against 28,206 units in the preceding year. In Chennai, the new supply declined to 12,743 units from 13,852 units.

Hyderabad's Significant Drop

Hyderabad saw a 58 per cent fall to 13,238 units from 31,645 units, while Kolkata witnessed a 41 per cent lower supply to 10,785 units compared to 18,406 units. Launches of homes up to Rs 1 crore declined 31 per cent in Mumbai to 6,062 units from 8,763 units. In Navi Mumbai, the new supply of homes dipped 10 per cent to 21,290 units over 23,584 units. Thane saw a 28 per cent fall to 57,029 units against 78,885 units.

Pune's Home Supply Decline

Pune saw a decline of 33 per cent to 50,095 units from 75,256 units. New supply of housing in Delhi-NCR fell 43 per cent to 2,672 units in 2024 from 4,726 units in the preceding year. To address the problem, Jasuja suggested that the government should incentivise developers to boost supply and provide benefits to home-buyers to enhance the demand.