India's Additional Housing Demand to be 29.5 lakh Units: C & W Report

In the latest study by global real estate consultancy Cushman & Wakefield (C&W), total new demand for urban housing in India is expected to be about 1.30 Crore units by the end of 2018 on account of the burgeoning population in urban centres.

This is addition to the already existing unmet demand. Of the total additional demand, the top 8 cities are likely to constitute 23 per cent or 2.95 mn (29.5 lakh) units.

Of the total additional demand across the top 8 cities, Middle Income Group (MIG) is expected to generate the highest volume of demand of 10.8 lakh units until 2018, followed by the Lower Income Group (LIG), which is expected to generate demand of about 10.5 lakh units, and the High Income Group (HIG) with a demand for 52,000 units.

Thus, both LIG and MIG will account for about 80 per cent of the total demand in these 8 cities.

City Wise-Category Wise..!

Estimated Demand (2014 to 18)

Estimated Supply (2014 to 18)

No. of Units	Estimated Demand (2014 to 18)			Estimated Supply (2014 to 18)
	LIG	MIG	HIG	LIG	MIG	HIG
Mumbai	75,700	107,300	48,400	2,400	73,400	127,600
Ahmedabad	114,300	104,500	29,200	6,900	34,300	3,000
Bengaluru	134,500	194,100	110,000	70,100	136,800	35,600
Chennai	142,900	127,900	63,600	7,700	88,600	5,400
Delhi-NCR	328,700	333,700	156,100	153,300	315,900	46,300
Hyderabad	121,600	105,700	64,100	10,200	38,000	12,600
Kolkata	51,200	33,500	12,600	16,000	35,300	14,300
Pune	80,700	76,200	34,300	12,100	55,600	9,800
TOTAL	1,049,600	1,082,900	518,300	278,700	777,900	254,600

Note..!

Differences, if any, are due to round - off The expected supply of residential house including existing under construction & planned pipeline is estimated to be 13.1 lakh housing units which is expected to be delivered across the top 8 cities by the end of 2018. The bulk of the under-construction units have already been sold.

Delhi-NCR is likely to have the highest supply of about 5,16,000 units delivered in the next 5 years, followed by Bengaluru with about 2,43,000 units and Mumbai with nearly 2,03,000 units.

Until 2018, the expected supply in the LIG will be about 21% of the total supply across top 7 cities, whilst demand constitutes 58 % share of the cumulative demand-supply gap.

Delhi-NCR, Kolkata, Mumbai and Pune are expected to witness the highest shortfall in LIG units. The MIG accounts for 59 % of the total supply across top 7 cities whilst it has a 23 % share in cumulative demand-supply gap.

Cities like Ahmedabad, Bengaluru & Mumbai are expected to lead the ranks of those with the shortfall of housing units catering to MIG. HIG accounts only for 19 % of the total supply across top eight cities and has a 20 % share in cumulative demand-supply gap.

Bengaluru, Chennai and Delhi-NCR are the leaders in cities with the highest demand-supply gap for HIG units.

Private sector housing

According to According to Mr. Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield, “The private sector housing, which is largely responsible for creating housing in India, has been grappling many issues like rising input costs, expensive land valuations, outdated building norms, restricted access to funding, serious delays in regulatory processes and uncertain economic conditions resulting in poor and/or slow sales volumes, all of which have resulted in holding back the growth of this sector since the last 2 to 3 years. Consequently, the demand-supply imbalances across cities have been becoming more pronounced.”

The key ingredient for economic growth and to provide necessary impetus on the supply side has been provided by the government. 

With an allocation of Rs. 4,000 crores for this year to the National Housing Bank (NHB) to build affordable urban homes and relaxation in FDI norms to attract more investments in to the sector (with higher exemptions for affordable housing projects).

Further the cause, RBI has also announced that affordable housing is now a priority sector, enabling banks to raise cheaper credit for such projects. 

Additionally, it also incentivized individual loans upto Rs. 50 lakhs (for houses valued upto Rs. 65 lakhs) in metros like Delhi, Mumbai, Kolkata, Chennai, Bengaluru and Hyderabad and loans upto Rs. 40 lakhs (for houses values upto Rs. 50 lakhs).

The government’s impetus on the demand side consists of increasing the Income Tax exemption limits and the exemption limits for payment of interest on home loans to lure homebuyers.

Goal of housing for all by 2022..!

 

Mr. Sanjay further added, “Whilst these policy measures are really welcome, they are not enough to address the huge demand-supply gap that has been projected until 2018. The current estimates are based on population growth and supply trends of the past decade. 

We still have to gear up for the massive industrialisation that will take place through the development of the planned industrial corridors and the smart cities that will be developed. Specifically, the government needs to focus on increasing the capacity of the private sector to increase the supply manifold by removing all bottlenecks in acquiring land, regulatory processes, raw materials, finances, etc. to meet its goal of housing for all by 2022.”

The additional or new demand that is expected to be generated in 2014-2018 is calculated based on the past trends of population and household growth and the income classification for the households. 

Hence, this does not take into consideration, existing unfulfilled demand of those without homes, living in congested homes and or in dilapidated structures.

As per the Ministry of Housing & Urban Poverty Alleviation’s (MHUPA) 2012 estimates, demand resulting from such housing shortages was around 1.878 crore in the entire country.

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