New Delhi: Urban housing demand is estimated at 41.56 lakh units till 2020, as against the expected supply of 10.23 lakh units, in top eight cities across the country, says a report.
The eight cities are: Ahmedabad, Bengaluru, Chennai, Delhi -NCR (NCT, Ghaziabad, Faridabad, Gurgaon and Noida), Hyderabad, Kolkata, Mumbai and Pune.
The total demand for urban housing is estimated at 4.2 million units during the period 2016-2020 across the top eight cities, said the report released by Cushman & Wakefield and GRI ‘Revitalising Indian Real Estate: A new era of growth and investment’.
Correspondingly, it said, the under-construction and planned supply of 1 million housing units by private developers is expected to be delivered across top eight cities.
Delhi-NCR continues to garner the highest proportion of demand (24 per cent) at around 10 lakh units by the end of 2020.
It is further estimated that, the LIG (below Rs 15 Lakhs) is the most under-serviced segment. While the LIG is likely to generate demand of about 19.8 lakh units by 2020, supply by private developers is barely of 25,000 units.
Similarly, though the MIG (Rs 15-70 lakh) accounts for 63 per cent of the total housing supply across eight cities during 2016-20 at 6.47 lakh units, the demand is estimated to be a much higher number of 14.57 lakh units.
“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 higher-than-expected prices or due to locations,” C&W MD (India) Anshul Jain said.
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, he added.
“The recent move to demonetise 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 said.