The top eight Indian cities could generate 2.1 million units of new housing demand in the country in the next five years, says a new report by global property consultant Cushman & Wakefield and Global Real Estate Institute (GRI).
This is 18% of 11.8 million units to be required in these cities in the period between 2012-18, the report said.
Of the total additional demand in the top eight cities, demand for mid-segment is estimated to be highest at approximately 59% or 1.3 million units, followed by demand in the high-end segment which is 451,000 units. The low-end segment is expected to see 362,000 of fresh demand in these cities in the next five years.
The Ministry of Housing & Urban Poverty Alleviation estimates such demand resulting from housing shortages at 18.78 million units for the entire country.
C&W’s calculation does not take into consideration, existing unfulfilled demand by those without homes, living in congested homes and or in dilapidated structures. C&W’s estimates also do not consider the existing or future demand from those living in rental houses and wanting to shift into their own houses, demand from NRIs or those wishing to purchase second homes/holiday homes for personal use and/or investments.
The supply for mid and high-end residential units is expected to be 1.16 million units during 2012 – 16 in the eight major cities. With the expected demand as stated above, the short fall of new housing units is expected to be approximately 600,000 units across the top cities in India. The total supply for 2012-16 is based on projects that are currently under construction or plans for which have been announced for by developers in each of the top eight cities.
The highest supply in mid and high-end categories will be NCR (334,000) followed by Bengaluru (191,708 units) and Chennai (159,056 units). Supply of mid-ranged properties, which is estimated at nearly 900,000 units in the next five years, is expected to be nearly four times that of high-end residential units, expecting to see a total supply of 260,000 units, across the major 8 cities.
Bengaluru is expected to witness the highest demand-supply gap for both MIG and HIG housing, followed by Ahmedabad and Hyderabad. As a result, property prices in these cities are likely to appreciate during the five year time period. However, moderation of supply by holding back new project launches and unforeseen project delays by developers may reduce the gap between demand and supply in the next few years.
