New housing project launches in the national capital region (NCR) slumped by 20% during January-June 2008. This is explained by the slowdown in demand due to appreciation in real estate prices and rising interest rates for borrowers.
The first half of this year also saw a marked shift in developers’ strategy towards mid-income houses, as the high-end segment witnessed increased resistance from buyers.
Project launches in the high-end category fell by two-third to just 5, while mid-income housing project launches rose by over 20% to 37.
As per a report by international property consultancy firm DTZ, the absorption of mid-income houses in July at 76% had overtaken that of high end houses (68%). This means that high end houses are selling at a slower pace than the mid income segment. The report says that the share of mid-income housing in the overall residential supply is expected to rise to 62% in three years, compared to 22% currently.
This translates into a CAGR of 131% for mid income housing units.