410 million people to stay in cities by 2015: FICCI-E&Y report

Report says urbanisation will be the single-largest factor driving demand for real estate and housing in particular

Urbanisation will be the single-largest factor driving demand for real estate and housing in particular. This growing population has rapidly fueled the process of urbanisation. With 31 out of every 100 people in the country living in the cities or towns, India has a higher number of people living in urban areas.

The retail space is currently witnessing excessive supply, however, the gap between demand and supply is narrowing.

Ajit Krishnan, partner & national leader-real estate practice, Ernst & Young, says, “In the residential sector, by 2015, more than 410 million people will be staying in cities, which is more than the population of the United States. The government of India's decision to allow FDI in multi-retail can be a boon for this segment.”

It is further expected that by 2040, 40% of the country's population will be living in urban areas.

The development of new housing stock at affordable range will be crucial to meet the housing shortage of 18.78 million. Even though the shortage (housing) has reduced, there is still a considerable shortage in the urban areas of India.

There are about 2 million dilapidated houses in urban India, which are in a state of disrepair amid old construction and sheer negligence. However, experts say planned redevelopment with rationalised floor space index could ease the housing woes in the worst-affected districts.

The report further says that India's development is currently focused around cities, while the urban fringes of the cities take on the character, load and spill from cities.

“Acknowledging this growth pattern and increasing focus on regional planning as opposed to restricted city planning will ensure planned city expansion.”