Mumbai, India – Renowned real estate magnate Niranjan Hiranandani, co-founder and managing director of the Hiranandani Group, has sounded a significant alarm regarding the state of India's affordable housing sector. Hiranandani revealed that this crucial segment has plummeted by 20% over the last two years, a downturn he describes as unprecedented in his more than four decades of industry experience.
Affordable Housing Faces Steep Decline
Speaking on The Neha Nagar Show, Hiranandani underscored the severity of the situation, stating, "In my 40-plus years of experience, this is the first time I have seen the bottom of the pyramid not growing and instead declining. A 20% fall is significant." This stark decline in affordable housing stands in sharp contrast to the overall robust performance of India's property market.
Broader Market Shows Resilience
Despite the challenges in affordable housing, Hiranandani confirmed that the broader real estate market remains on a strong growth trajectory. He noted that after the initial impact of the COVID-19 pandemic, demand for housing grew at a compound annual rate of 10-15% for approximately three years, with retail home loans expanding by about 15%. This boom was largely attributed to shifting consumer behavior, where homes became central hubs for work, education, and daily life.
Hiranandani firmly rejected comparisons between the current market conditions and the 2008 global financial crisis. "The current situation is not comparable. India's growth over the last three years has been unique. We are the fastest-growing major economy in the world. So you cannot compare today's situation with 2008," he asserted.
Call for Targeted Policy Intervention
While expressing confidence in the overall strength of the Indian real estate market, Hiranandani stressed that the affordable housing segment remains a critical weak spot. He highlighted that despite efforts from both government and private sectors, this segment has failed to expand as expected and will continue to be problematic without specific, targeted interventions.
"This segment has been and will remain problematic unless specific interventions are made. So yes, there is a slowdown, but it is largely concentrated in the affordable housing segment. Other segments have not seen such declines," Hiranandani concluded, emphasizing the urgent need for policy adjustments to support India's most vulnerable homebuyers.