Supply pressure for affordable housing despite strong demand

Despite increasing demand for affordable housing in India, there is a shortage of supply as developers are not adding inventory for end customers, housing finance experts said at Business Standard BFSI Summit on Thursday.

- AATHIRA VARIER & PRACHI PISAL

However, the affordable housing segment will continue to remain a critical sector, said the experts. They were discussing the Banking on Bricks - Knight Frank housing report.

"Affordable housing caters to an unorganized segment of the society. I believe there is a demand for affordable housing, but the supply is limited. I don't think many of the developers are interested in getting into affordable housing. It's low-cost, it's mostly on the outskirts of a city where they are not sure of demand due to lack of livability conditions," said Tribhuwan Adhikari, managing director (MD) and chief executive officer (CEO), LIC Housing Finance.

"And, developers are into a business and they want margins. I don't think the affordable segment is as margin intensive as semi-luxury or luxury. However, I believe that the demand for affordable housing is there and will continue to be there in years to come," Adhikari added.

Meanwhile, Gulam Zia, senior executive director, Knight Frank India, said affordable housing stocks are very limited and developers are not adding more.