New Delhi: India is estimated to have a cumulative affordable housing shortage of 31.2 million units by 2030, creating a potential market size of Rs 67 trillion for real estate developers, according to a joint report by CII and Knight Frank. Industry body CII and real estate consultant Knight Frank India on Wednesday released a joint report ‘Affordable Housing in India’ at a conference here, pointing out that there is already an existing shortage of 10.1 million units.
Addressing the event, Ghulam Zia, Senior Executive Director, Research, Advisory, Infrastructure & Valuation at Knight Frank India, pointed out the shortage of affordable housing in India, presenting a huge business opportunity for real estate developers.
“The cumulative affordable housing shortage in India is projected to reach 31.2 million by 2030, with the market size estimated at Rs 67 trillion,” he said. The affordable housing segment also could provide a lot of opportunities for financial institutions. “Based on the assumption of a 77 per cent loan dependency and Loan-to-Value ratios applied at various loan thresholds, the potential financing opportunity for banks and Housing Finance Companies in the Affordable housing segment is estimated to be Rs 45 trillion,” the report said.
This represents a substantial increase, being three times more than the existing loan volume in this segment, it added. HDFC Capital MD and CEO Vipul Roongta stressed on scale of operations and the right marketing strategy for the affordable and mid-income housing segment. Roongta said his company focuses on financing the middle and low-income housing segment, which it defines as homes below Rs 2 crore in Delhi and Mumbai and lower than Rs 1 crore in other cities.
He said the HDFC Capital has financed around 3 lakh homes. Roongta said there is a need to position affordable homes in a better way. He said the affordable homes can be small but not non-premium. The report estimated that 1.9 lakh acre of land would be required for building an estimated 31.2 million housing units.
It suggested the provision of vacant PSU lands for affordable housing development under public-private partnership. The report also recommended the provision of additional free FSI (Floor Space Index) for affordable housing projects as well as tax incentives for developers.
“We have estimated an affordable housing demand of 31.2 mn units by 2030. This also includes an existing shortage of 10.1 mn units. This demand is concentrated in the income groups with an annual income of up to Rs 9 lakhs; categorised into EWS (annual income up to Rs 3 lakh), LIG (3-6 Lakhs) and MIG ( 6-9 lakhs),” Knight Frank said.
Property consultancy Knight Frank in a report stated that India’s affordable housing sector may be staring at a 31.2 million units shortage by 2030 presenting a Rs 67 trillion opportunity for real estate companies. Economy Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
