"What are the consequences of keeping over 1 crore vacant flats in India? - An interview with NAREDCO President G Hari Babu"

Among other things, Babu throws light on the influx of high net-worth individuals (HNIs) and institutional investors in the residential real estate space, and what can be done to spur growth in affordable housing.

Launches of high-end residential units priced above Rs 1.5 crore skyrocketed by a staggering 1,000 per cent between 2019 and 2023, according to property consultancy firm Anarock. In the meantime, new launches of units priced below Rs 75 lakh, including affordable housing, remained stagnant in the country’s top seven cities.

In a conversation with AGGAM WALIA, National Real Estate Development Council (NAREDCO) National President G HARI BABU delves into the growing trend of premiumisation in the real estate sector even as the high-demand affordable housing segment appears to be short on supply. Among other things, Babu throws light on the influx of high net-worth individuals (HNIs) and institutional investors in the residential real estate space, and what can be done to spur growth in affordable housing.

There has been a noticeable trend of developers gravitating towards big-ticket launches in metro cities.

Why is this happening?

For example, if you take Hyderabad in 2022, 5,300 affordable homes or flats were sold. But in 2023, the reduction is by almost 1,500 flats to only 3,800 affordable flats sold. At the same time, the luxury segment has grown…people’s wealth has increased. But in terms of wealth distribution, we have a scary scenario. For example, 31.5 per cent of wealth is concentrated with the top 1 per cent of the population, and another 31.5 per cent is concentrated with 9 per cent. So, all the growth is limited to the top 10 per cent segment, which amounts to roughly 14 crore people…and most builders are trying to cater to the top 10 per cent of the population.