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Affordable homes becoming unviable
Sep 3, 2012

Back in 2008, real estate developers had drawn up aggressive plans for building 'affordable' homes (upto Rs 20 lakhs) in the country. However, on account of the severe downturn in the real estate industry and the deteriorating financial health of real estate players, the affordable housing segment is becoming financially unviable. One of the major reasons being that over the last few years, costs of construction materials such as cement and steel have shot up significantly. This has forced many developers to withdraw from this segment after doing initial projects. Only a few are going ahead with such projects now. As today's chart of the day shows, between 2009 and 2012, the number of unit launches declined by 57% in the Mumbai Metropolitan Region. The sales of affordable homes have also been witnessing a lacklustre trend. Over the same period, the absorption of affordable homes has declined by 42%. Buying an affordable home in Mumbai will probably just remain a dream.

Data source: Business Standard
*Mumbai Metropolitan Region; ^Data upto July 2012

This Chart Of The Day was published in The 5 Minute WrapUp - Can retail investors beat experts?

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