The article highlights a significant issue in India’s housing market: over 1 crore flats remain vacant, prompting concerns about the underutilization of assets. Between 2019 and 2023, launches of high-end residential units priced above Rs 1.5 crore surged by 1,000%, while new launches of units priced below Rs 75 lakh, which include affordable housing, saw no significant growth in the top seven cities of the country.
G Hari Babu, National President of the National Real Estate Development Council (NAREDCO), discusses this trend of premiumisation in the real estate sector. Despite a high demand for affordable housing, the market is skewed towards luxury units due to the influx of high net-worth individuals (HNIs) and institutional investors. This trend is evident in cities like Hyderabad, where the sale of affordable homes dropped from 5,300 in 2022 to 3,800 in 2023, while the luxury segment expanded.
Babu points out the disparity in wealth distribution in India, where the top 10% of the population holds 63% of the wealth. Builders are primarily catering to this affluent segment, which comprises approximately 14 crore people. The article calls for measures to stimulate growth in affordable housing to address the needs of the broader population and ensure more equitable wealth distribution.
