Centre, state governments have been paying attention to housing for the poor.
New Delhi: Developers and real estate experts feel that Budget 2020 is likely to give a boost to the real estate sector in the long run, but it will not rescue the middle-budget and luxury housing segments.
The Central and state governments have been paying much attention to housing for the poor section, but the middle-budget and luxury housing segments are still witnessing a rise in unsold units. Data has revealed that the unsold stock of luxury houses has increased to an average of 10% in the top seven cities of the country.
R.C. Sharma, Registrar of RERA Rajasthan, told The Sunday Guardian: “In the current budget, affordable housing has surely got a major push, but the mess that is there in the real estate sector is not going to clear anytime soon as there is no major push for the sector. The finance minister did offer or announce any long term or short term policy measures for the middle-budget and luxury housing segments.”
The current state of the middle-budget and luxury housing segments shows that the sector is facing an acute crisis due to low sales. As per property data of 2019, at least 89,200 luxury housing units, priced at Rs 1.5 crore, remained unsold across the top seven cities of the country, while in 2018, there were 81,290 unsold luxury units.
The total value of unsold luxury housing stock is approximately Rs 1.59 lakh crore—that is 34% of the total value of the entire unsold housing stock, according to data. The data also suggest that the total value of the unsold housing stock across segments is at Rs 6.48 lakh crore. Cities that have witnessed the lowest sale in luxury and mid-budget housing units include Bangalore, Chennai, Hyderabad, Kolkata, NCR and Pune, besides others.
According to property market experts, the rise in sales in the mid-budget and luxury housing segments has the ability to revive the entire housing sector as a huge amount of money is just stuck in this housing segment, without earning any surplus.
Anuj Puri, chairman, ANAROCK Property Consultants, said: “Snapped up like hotcakes by investors in previous years, luxury housing sales are still in the doldrums and hinging largely on end-user sales. Even after three years of demonetisation, the sale in the housing sector remains poor in the entire housing segment, but the luxury and mid-budget housing segments are facing the worst situation.”
A sluggish sale is not only limited to luxury housing; the middle-budget housing segment priced between Rs 40-80 lakh is also facing the same situation and has the maximum unsold stock that is 15%, translating into nearly 2.27 lakh units are of this segment. The situation in the affordable housing segment is slightly different as affordable housing with the highest new supply in 2019, saw unsold stock reducing by a marginal 1%—from 2,38,750 units in 2018 to 2,36,640 units in 2019.