Mahindra Lifespaces, the real estate division of Mahindra Group, is poised to enter the affordable housing market within the next year. The company is setting its sights on serving the middle-income demographic. "We are looking at opportunities to enter into the affordable housing sector, but it is still at the discussion stage. It may take one year to concertise the plan," stated Pawan Malhotra, Managing Director and Chief Executive Officer of Mahindra Lifespaces.
Several factors have converged to make affordable housing a significant trend in the real estate industry. Among these are the escalating costs of property acquisition, increasingly expensive and less accessible home loans, persistent inflation, and a substantial gap between housing demand and supply.
A study conducted by Ernst and Young, which mapped the supply trends of housing provided by private developers, revealed that a significant majority, between 70% and 80%, caters exclusively to higher-income brackets. This imbalance exacerbates the housing crisis.
Meanwhile, the Planning Commission projects a dramatic increase in India's housing shortage, anticipating a deficit of 26.53 million units over the coming four years. A staggering 99% of this shortfall affects economically weaker sections and low-income groups, highlighting the urgent need for affordable housing solutions.
Recognizing the potential of high-volume sales to compensate for lower margins in this segment, numerous established real estate companies have ventured into the affordable housing market. Puravankara and Omaxe Ltd are among the prominent players already active in this new asset class within the real estate sector.
Furthermore, several other developers, including Matheran Realty, Indu Projects, Shriram Properties, Jain Heights and Structures, Ansal Properties, and Shapoorji Pallonji, have either initiated projects in affordable housing or are preparing to join this growing market.