Affordable housing may bear brunt of US tariffs
Local developers though are confident they will be able to tide over the challenge as they feel the impact will be temporary.
"Trade tensions between India and the US are mounting post the imposition of 50% tariffs as it is causing widespread trade disruptions. If not negotiated into moderation, they will massively impact many critical yet vulnerable sectors that drive India's affordable housing segment," said Anarock executive director (research & advisory) Prashant Thakur.
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Across the country, this category priced at Rs 45 lakh or less took the biggest hit during the pandemic and is still struggling to find firm ground in most cities. Kolkata has been one of the prominent markets among the top seven cities that witnessed decent new launch supply of affordable housing over the last few years. According to the half-yearly residential sales report of real estate consultancy firm Knight Frank India, 4,972 units or 41% of all residential houses sold were in the affordable category.
"A substantial chunk of the affordable home buyers are those who are employed in the MSME sector," said Thakur. Bengal has around 90 lakh MSME units that employ around 1.4 crore people.
Realtors in Kolkata, though, are optimistic about riding over the bump and are confident that the impact will be minimal and temporary. Siddha Group managing director Sanjay Jain felt customers can defer the decision to purchase homes, leading to a temporary slowdown.
"Someone else who is not impacted will buy while others will wait a bit longer. Since there is no appreciation in the real estate market now, it will not hurt the buyer," he said.
Credai Bengal president Sushil Mohta felt that the impact, if any, may be short-term. "Not just housing, if there is an impact, it will be on the entire economy. But I do not believe this will have any long-term effect," he said, adding that the government can take serious steps to improve ease of doing business that can help reduce overhead and interest costs.
Credai Kolkata president Siddharth Pansari felt any decline in the export of raw materials like steel can actually work to the housing industry's advantage as it can reduce home prices. "The definition of affordable housing has also changed. It has moved up from Rs 45 lakh to Rs 65 lakh in Kolkata. I don't think this segment will be majorly impacted by the tariff war," he said.
Biplab Kumar, senior vice-president at NK Realtors, pointed out that affordable housing has been shrinking over the years. "In 2018, affordable housing priced up to Rs 45 lakh made up about 40% of total home sales. By 2021, that dropped to around 37%, and in the first half of 2025, it's fallen further to 32%. This clearly shows a shift in buyer preferences. That growing demand for mid-income housing could help offset some of the impact from the slowdown in the affordable segment," he remarked.
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