In The News
Housing demand estimated to be over two million units in five years: Report A recent report titled Embracing Change - Scripting the future of Indian Real Estate estimated a total demand of 2.3 million units of residential property in the next five years, while the estimated supply in the same year is expected to be approximately 1 million units leaving a short fall of over 1.3 million units. The report analyzed demand for the top seven cities - NCR, Mumbai,Bangalore,Chennai,Pune,Hyderabad and Kolkata.
According to the Report, India is expected to experience a demand of 3.94 million housing units, growing at a steady pace of 11% Compounded Annual Growth Rate (CAGR). Of this 2.3 million units will be the demand from top seven cities alone.
NCR is expected to record the highest demand of over 700,000 units, Mumbai is expected to record the highest CAGR of 14% between 2011- 15. Bangalore is expected to see a demand of approximately 287,000 units in this period. As a result of significant population migrating into Tier 1 cities,these locations are likely to witness highest demands.
The anticipated demand is likely to exert an upward pressure on property prices especially in markets like NCR, Mumbai and Bangalore where the demand supply gap is high. On the other hand, the tier II cities such as Pune, Hyderabad, etc as a result of the relatively lower demand supply gap between 2011 -15 in Tier II cities, are likely to see appreciation of capital values at a slower pace compared to Tier 1 cities during this time period.
Of the total demand in the top seven cities, the mid-ranged housing segment is expected to drive the maximum demand (45%). Majority of the developers in the top seven cities are concentrating on this segment which would help reduce the supply /demand gap. On the other hand, the affordable segment of the property market which is likely to register approximately three times more demand than supply might see gap increasing during the next five years(2011-2015).