News: Housing demand across top 8 cities during 2016­2020 estimated at 4.2 million units: Report-08.01.2017

Date created 08.01.2017 18:50:32

Housing demand across top 8 cities during 2016­2020 estimated at 4.2 million units: Report 

BENGALURU: The total demand for urban housing is estimated at 4.2 million units during the period 2016­2020 across the top eight cities, as per report released by Cushman & Wakefield and GRI mentioned. Correspondingly, the existing underconstruction and planned supply of one million housing units by private developers is expected to be delivered across top eight cities during the said period. Delhi­NCR (NCT, Ghaziabad, Faridabad, Gurgaon and Noida) continues to garner the highest proportion of demand (24%) at around one million units by the end of 2020

It is further estimated that LIG (below Rs 15 lakh) is the most under­serviced 0 Comments 04:05 PM | 06 JAN MARKET STATS Search for News, Stock Quotes & NAV's It is further estimated that LIG (below Rs 15 lakh) is the most under­serviced segment. While it is likely to generate a demand of about 1.98 million units by 2020, the supply by private developers is barely 25,000 units. Similarly, though the MIG (Rs 15­70 lakh) accounts for 63% of the total housing supply across eight cities between 2016 and 2020 at 647,000 units, the demand is estimated to be a much higher number of 1,457,000 units. Anshul Jain, Managing Director, India, Cushman & Wakefield said, "At the ground level, despite demand grossly outstripping supply, there is a considerable proportion of unsold inventory in the MIG and HIG categories, which are not absorbed as these properties are unable to demonstrate value for their buyers. Such units fall out of preference either on account of higher­thanexpected prices or due to locations. Lack of funds and high land and development costs are the primary reasons for developers not opting for smaller sized units closer to city centres as profitability drastically reduces. Despite encouragements from the government through taxation and funding relief, under the Housing for All 2022 Vision, top cities of India have not seen a significant shift in supply for reduced sized apartments within the MIG or LIG. Further, the recent move to demonetize large currencies in order to crack down on black money, the demand for HIG and Luxury housing could temper further. This is expected to propel developers to recalibrate their plans to suit the high demand segments of affordable housing." Jain added, "To be able to utilise the opportunity of the shortfall in supply to demand, private developers will need to change their approach and bring in better strategies, systems, technology and funding options. Some international development companies are actively scouting the various local markets to identify the right opportunities for themselves; Indian developers will need to gear up to meet their onslaught and remain relevant and profitable." The urban housing demand is the highest in Delhi­NCR across all 3 segments amongst the top 8 cities, forming nearly 24­26% of the demand in each of the categories. Mumbai and Bangalore will follow Delhi­NCR and are expected to generate housing demand of about 711,000 and 686,000 units respectively over the next five years. While the majority of the demand emanates from MIG within Mumbai, LIG accounts for the maximum proportion in Bangalore. In most of the cities, except Mumbai, developers are currently focusing on MIG with 60­ 70% of the upcoming supply concentrated in this segment. Ahmedabad is expected to account for around 6% of the cumulative demand between 2016 and 2020, with nearly 92% of the demand concentrated in LIG and MIG.