Whither PMAY? Affordable housing in decline as Indian real estate shifts focus to premium segments

By Rajiv Shah

A leading property consultant that seeks to provide comprehensive real estate services to developers, corporates, financial institutions, and the government has reported that, while housing prices have risen between 10–34% across India's top seven cities over the past year, the once-robust supply of affordable housing has "tottered and dwindled."

In an in-depth analysis of real estate in Bengaluru, Chennai, Hyderabad, Kolkata, Pune, the National Capital Region (NCR), and the Mumbai Metropolitan Region (MMR), in a series of reports it has sent to Counterview as email alert, the consultant Anarock states that NCR and Bengaluru have recorded the highest jumps in housing prices—34% and 20%, respectively.

According to Anarock, average prices in the seven cities collectively have risen from INR 7,550 per sq. ft. at the end of Q1 2024 to INR 8,835 per sq. ft. by the end of Q1 2025. However, at the same time, the annual supply share of affordable homes has declined—from 40% in 2018 to 16% in 2024.

The reason, says Anarock, is that the target clientele of affordable homes, consisting of "blue-collar workers, lower-paid workforces, and those just starting out in their careers, were severely cash-strapped," leading to a situation where "buying homes did not feature among their immediate priorities."

According to data released by Anarock, in 2018, cities like Pune, Kolkata, Chennai, and NCR were witnessing a consistently "high supply of such homes, riding on stimuli such as lower GST rates and tax breaks."

Defining affordable housing as units priced under INR 40 lakh, the consultant comments that, judging by their sagging sales and supply in India over the past few years, now "it is easy to forget that this segment was once the housing industry’s veritable poster child," which Indian real estate developers took "very seriously, regularly engaging with their architects to design smaller units to contain prices and ensure sales continuity."

Pointing out that this trend peaked when the Union government in 2015 made "concerted efforts" to promote affordable housing via the ‘Housing for All’ programme under the Pradhan Mantri Awaas Yojana - PMAY (Urban), Anarock says the government at that time announced "many attractive incentives for buyers and developers of such housing."

In fact, "the affordable housing story took on an appealingly patriotic 'nation-building' sheen, and even big-brand developers got into the fray..."

Housing units (affordable+luxury) in 7 top cities

Noting that things changed during the pandemic when the demand for "larger and multi-functional homes with a comprehensive spread of lifestyle amenities" surged, Anarock says the demand shifted to houses that could effectively serve "as both residential facilities and offices... This trend continues even today, and essentially small-sized affordable housing plays no role in it."

At the same time, it says, "at the developers’ end, constantly rising input costs—comprising land, labour, and construction materials (compounded by the low profit margins of affordable housing and the withdrawal of all relevant fiscal benefits)—caused their previous enthusiasm for affordable housing to dwindle. Instead, they turned their focus to what was and continues to sell well: bigger units with good lifestyle amenities."

The result is that today, Bengaluru is "devoid of any supply in this segment. Hyderabad and Chennai are seeing only a minimal 2% supply share. The only cities with any sizeable activity in this segment are Kolkata and MMR. In both these cities, nearly 31% of the total upcoming supply is priced below INR 40 lakh. NCR has witnessed a drastic reduction in its share of affordable housing, falling from 62% in 2020 to only 11% in 2024."

Ironically, despite the sharp downward trend in affordable housing, Anarock research suggests the real estate sector remained a dominant contributor in 2024 in fundraising via qualified institutional placements (QIPs), "both in terms of capital raised and the number of issues." Notably, 2024 saw twice the number of QIP issues as the previous year. In fact, the sector "recorded the highest number of issues in a single year" in 2024.

However, Anarock regrets, "Skyrocketing residential prices, coupled with geopolitical headwinds, have slowed the Indian housing market’s bull-run in Q1 2025. Latest Anarock data finds that the year's first quarter saw sales drop 28% across the top seven cities compared to the same period in 2024. Approximately 93,280 units were sold in Q1 2025 in the top seven cities, in sharp contrast to all-time high sales of over 1.30 lakh units in Q1 2024."

Noting that approximately 93,280 units were sold in Q1 2025—a 26% decrease over Q1 2024—Anarock suggests the main reason for this was, "Average residential property prices across the top seven cities saw a significant jump in the last one year—ranging between 10–34% in Q1 2025 compared to Q1 2024."

"This," it insists, "was primarily due to steep new supply additions in the luxury and ultra-luxury segment, and overall strong demand. NCR and Bengaluru recorded the highest annual price jump of over 34% and 20%, respectively."

Real estate attracted highest investment in 2014

In fact, Anarock asserts, private equity (PE) investments in the Indian real estate sector have shown signs of softening. Offering details in its report titled Anarock Capital Flux FY25 Annual Edition, it reveals that PE investment volumes in Indian real estate "have steadily declined over the past five years, dropping from USD 6.4 billion in FY21 to approximately USD 3.7 billion in FY25."

This represents a 43% decrease from FY21 levels, primarily driven by reduced foreign investor activity amid heightened global macroeconomic uncertainty and geopolitical volatility,” Anarock underlines, adding that this is accompanied by a significant increase in "concentration of capital in fewer, larger transactions."

Thus, says Anarock, in FY25, the top 10 deals accounted for 81% of total PE investment value, up from 69% in FY24. This spike is largely attributed to the mega Reliance–ADIA–KKR hybrid deal, which alone contributed to ~42% of FY25’s total value.

The “mega Reliance–ADIA–KKR hybrid deal” refers to a financing transaction in which Reliance Industries secured a blended capital infusion from two heavyweight global investors, the Abu Dhabi Investment Authority (ADIA) and Kohlberg Kravis Roberts (KKR), an American global private-equity and investment company.

Stating that "FY25 saw a significant deviation in funding structure, with hybrid deals surging to 42% of total PE capital—primarily due to the Reliance-ADIA-KKR transaction," Anarock notes that "logistics and warehousing" have emerged "as the clear frontrunner in FY25, attracting 48% of PE funding, the highest in five years."

As for the residential sector, Anarock says its average deal size dropped to USD 117 million (Q2–Q4 FY25) from USD 233 million (Q1 FY23–Q4 FY25). Offices also saw a "steep decline in investment"—USD 806 million in FY25 versus USD 2.2 billion in FY24.

However, retail "continues to thrive on strong consumer demand," with mall operators like DLF, Nexus, and Phoenix expanding aggressively.

Comments

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Rajiv Shah Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

New RTI draft rules inspired by citizen-unfriendly, overtly bureaucratic approach

By Venkatesh Nayak* The Department of Personnel and Training , Government of India has invited comments on a new set of Draft Rules (available in English only) to implement The Right to Information Act, 2005 . The RTI Rules were last amended in 2012 after a long period of consultation with various stakeholders. The Government’s move to put the draft RTI Rules out for people’s comments and suggestions for change is a welcome continuation of the tradition of public consultation. Positive aspects of the Draft RTI Rules While 60-65% of the Draft RTI Rules repeat the content of the 2012 RTI Rules, some new aspects deserve appreciation as they clarify the manner of implementation of key provisions of the RTI Act. These are: Provisions for dealing with non-compliance of the orders and directives of the Central Information Commission (CIC) by public authorities- this was missing in the 2012 RTI Rules. Non-compliance is increasingly becoming a major problem- two of my non-compliance cases are...

N-power plant at Mithi Virdi: CRZ nod is arbitrary, without jurisdiction

By Krishnakant* A case-appeal has been filed against the order of the Ministry of Environment, Forest and Climate Change (MoEF&CC) and others granting CRZ clearance for establishment of intake and outfall facility for proposed 6000 MWe Nuclear Power Plant at Mithi Virdi, District Bhavnagar, Gujarat by Nuclear Power Corporation of India Limited (NPCIL) vide order in F 11-23 /2014-IA- III dated March 3, 2015. The case-appeal in the National Green Tribunal at Western Bench at Pune is filed by Shaktisinh Gohil, Sarpanch of Jasapara; Hajabhai Dihora of Mithi Virdi; Jagrutiben Gohil of Jasapara; Krishnakant and Rohit Prajapati activist of the Paryavaran Suraksha Samiti. The National Green Tribunal (NGT) has issued a notice to the MoEF&CC, Gujarat Pollution Control Board, Gujarat Coastal Zone Management Authority, Atomic Energy Regulatory Board and Nuclear Power Corporation of India Limited (NPCIL) and case is kept for hearing on August 20, 2015. Appeal No. 23 of 2015 (WZ) is filed, a...

Celebrating 125 yr old legacy of healthcare work of missionaries

Vilas Shende, director, Mure Memorial Hospital By Moin Qazi* Central India has been one of the most fertile belts for several unique experiments undertaken by missionaries in the field of education and healthcare. The result is a network of several well-known schools, colleges and hospitals that have woven themselves into the social landscape of the region. They have also become a byword for quality and affordable services delivered to all sections of the society. These institutions are characterised by committed and compassionate staff driven by the selfless pursuit of improving the well-being of society. This is the reason why the region has nursed and nurtured so many eminent people who occupy high positions in varied fields across the country as well as beyond. One of the fruits of this legacy is a more than century old iconic hospital that nestles in the heart of Nagpur city. Named as Mure Memorial Hospital after a British warrior who lost his life in a war while defending his cou...

Political misfires in Bihar: Reasons behind the Opposition's self-inflicted defeat

By Vidya Bhushan Rawat* The Bihar Vidhansabha Election 2025 verdict is out. I maintained deliberate silence about the growing tribe of “social media” experts and their opinions. Lately, these do not fascinate me. Anyone forming an opinion solely on the basis of these “experts” lives in a fool’s paradise. I do not watch them, nor do I follow them on Twitter. I stayed away partly because I was not certain of a MahaGathbandhan victory, even though I wanted it. But my personal preference is not the issue here. The parties disappointed.

History, culture and literature of Fatehpur, UP, from where Maulana Hasrat Mohani hailed

By Vidya Bhushan Rawat* Maulana Hasrat Mohani was a member of the Constituent Assembly and an extremely important leader of our freedom movement. Born in Unnao district of Uttar Pradesh, Hasrat Mohani's relationship with nearby district of Fatehpur is interesting and not explored much by biographers and historians. Dr Mohammad Ismail Azad Fatehpuri has written a book on Maulana Hasrat Mohani and Fatehpur. The book is in Urdu. He has just come out with another important book, 'Hindi kee Pratham Rachna: Chandayan' authored by Mulla Daud Dalmai.' During my recent visit to Fatehpur town, I had an opportunity to meet Dr Mohammad Ismail Azad Fatehpuri and recorded a conversation with him on issues of history, culture and literature of Fatehpur. Sharing this conversation here with you. Kindly click this link. --- *Human rights defender. Facebook https://www.facebook.com/vbrawat , X @freetohumanity, Skype @vbrawat

From fake interviewer to farmer’s advocate: Akshay Kumar’s surprising role in 'Jolly LLB 3'

By Prof. Hemantkumar Shah* At the luxurious INOX theatre in Sky City Mall, Borivali East, Mumbai, around seventy upper-middle-class viewers attended the 10:45 a.m. screening of Jolly LLB 3. In the film’s concluding courtroom sequence, Arshad Warsi’s character asks the judge whether he would willingly surrender one of his own homes to the government for a development project in Delhi.

Epic war against caste system is constitutional responsibility of elected government

Edited by well-known Gujarat Dalit rights leader Martin Macwan, the book, “Bhed-Bharat: An Account of Injustice and Atrocities on Dalits and Adivasis (2014-18)” (available in English and Gujarati*) is a selection of news articles on Dalits and Adivasis (2014-2018) published by Dalit Shakti Prakashan, Ahmedabad. Preface to the book, in which Macwan seeks to answer key questions on why the book is needed today: *** The thought of compiling a book on atrocities on Dalits and thus present an overall Indian picture had occurred to me a long time ago. Absence of such a comprehensive picture is a major reason for a weak social and political consciousness among Dalits as well as non-Dalits. But gradually the idea took a different form. I found that lay readers don’t understand numbers and don’t like to read well-researched articles. The best way to reach out to them was storytelling. As I started writing in Gujarati and sharing the idea of the book with my friends, it occurred to me that while...

A comrade in culture and controversy: Yao Wenyuan’s revolutionary legacy

By Harsh Thakor* This year marks two important anniversaries in Chinese revolutionary history—the 20th death anniversary of Yao Wenyuan, and the 50th anniversary of his seminal essay "On the Social Basis of the Lin Biao Anti-Party Clique". These milestones invite reflection on the man whose pen ignited the first sparks of the Great Proletarian Cultural Revolution and whose sharp ideological interventions left an indelible imprint on the political and cultural landscape of socialist China.

Search This Blog