Nirupa Shankar told Nikhil Kamath of Zerodha, why making affordable housing is difficult!

India Real Estate Market: Is the dream of buying an affordable house below Rs 50 lakh going away from homebuyers due to the sharp rise in land prices? Nirupa Shankar, joint MD of real estate company Brigade Enterprises, has pointed this out in the podcast of Zerodha co-founder Nikhil Kamath. He told that it has become very difficult to build a house in the affordable segment.

Why has it become difficult to build affordable houses?

In the latest episode of Nikhil Kamath’s podcast (WTF is with Nikhil Kamath?), Irfan Razzaq, Chairman and MD of real estate sector giant Prestige Group, Nirupa Shankar, Joint MD of Brigade Enterprises and WeWork India. CEO Karan Veerwani attended. On the issue of affordable housing, Nirupa Shankar said, making affordable housing has become the most difficult. Houses priced between Rs 45 lakh to Rs 60 lakh are called affordable housing. But the way land prices are increasing, it has become very difficult to build affordable housing. Citing the report of Knight Frank India in the first week of October, he said that affordable housing has declined by 50 percent.

Has the definition of affordable housing segment changed?

According to Knight Frank, 46 percent of the total sales of housing units are of houses priced at Rs 1 crore or more. The share of houses priced between Rs 50 lakh and Rs 1 crore in total housing sales is 30 per cent, while the share of sales of houses priced below Rs 50 lakh is 24 per cent. Nirupa Shankar said that builders consider only houses priced above Rs 3 crore as luxury segment houses. Houses priced between Rs 1.3 to 3 crore fall in the upper mid-premium category and houses priced below this come in the affordable segment.

Why is the demand for affordable houses decreasing?

Knight Frank India said in its report that during the third quarter of 2024, from July to September, there has been a decline of 14 percent in the sales of houses priced at Rs 50 lakh or less. A total of 20,769 units of houses in this segment have been sold which was 23,026 units in the third quarter of 2023. The main reasons for this are the rise in house prices, expensive home loan interest rates and lack of demand. According to Knight Frank India, due to the increase in house prices, homebuyers in this price segment have stayed away from the market, whereas due to less launching of affordable segment houses along with reduction in supply, less houses in this segment are being sold.

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