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Affordable housing dream of millions in India gets closer to reality

RBI's rate cuts and revised lending norms could help a segment that developers have largely ignored

The year was a mixed bag for the real estate industry as housing supply slowed down but record investments came in. Industry experts believe that demand will stabilise as sales are likely to be lower compared to 2023.
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An issue that needs to be addressed is the lack of adequate supply being created in specific markets due to high land acquisition costs, lengthy approval process and construction costs

Raghu Mohan
Unsold stock in the affordable housing segment shrank by 19 per cent to about 113,000 units by the end of the first quarter of calendar year 2025. Anuj Puri, chairman of Anarock Group, says there is strong demand but “developers have largely avoided this segment, resulting in minimal new launches in recent years”. Consequently, people are purchasing from the existing inventory. Rising costs of land acquisition, construction and approval have also pushed builders to prioritise premium projects, “as affordable housing offers very thin margins. Furthermore, property prices have soared across cities, exacerbating the affordability crisis.”
 
But things could change after