In the next six years, urban India needs to build at least 10.5 million houses to meet the demand for housing that accompanies rising levels of urbanization. With the financial crisis bringing affordable housing back on the radar of promoters and builders, it is worthwhile to estimate the extent of unmet demand for low-cost houses.
As much as 65% of the demand in India’s top 112 cities is for houses measuring less than 1,000 sq. ft. This translates into approximately 6.8 million new homes. Interestingly, about 70% of the demand would be for houses with two rooms or less. This means 7.4 million new houses need to meet these specifications. This is because 90% of the urban households have incomes under Rs5 lakh per annum.
Thus, the demand for majority of the urban housing would be in this category. The rising slum and squatter settlements in cities is a clear sign that this demand is not being met through formal housing stock.
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very true. but salaried people dont buy houses until they are near retirement. Most people spend their entire life in rented accomodation.
ReplyDeleteof course most cities with IT impact have large numbers of small businessmen and other service providers who have benefited from the IT boom indirectly. They are sure to drive the demand for large houses now. This second wave of rich buyers will soon drive the market up.
ReplyDeleteThough it is good to collect such stats and work towards minimising the gap between available and required, the basic issue is being lost here... Government should strive to improve infrastructure across the country not only in urban areas but the next tier towns and for that matter even the rural villages... This will distribute the demand evenly removing the horrendous pressure on the urban cities...
ReplyDeleteOfcourse since your blog is from housing demand perspecive and that too limited from pune's perspective, this may not be the correct place to voice this.. But I put it forward because this point is inherently part of the demand of housing in urban areas ...
The prices of homes are out of reach of many families across India. Only the very wealthy can afford to buy a flat or a house. Government should cater for low cost housing projects.
ReplyDeleteMeridian real estate
# Ref: "But I put it forward because this point is inherently part of the demand of housing in urban areas ..."
ReplyDeleteYes, thanks for the comment!
Hi.. those are nice stats..Even during the recession times the house rents have not hit a low as anticipated
ReplyDeleteIdaho Real Estate
i think tier-2 cities like Pune will benifit in the downturn with growth in the suburbs. Though the prices may not correct in the core-city pockets, i believe there will be a new wave of affordable housing in the suburbs. I see every chance of this happening soon because cities like Pune will never see a recession in the population growth or employment growth. The people getting migrated to Pune continue to be on the rise.
ReplyDeleteThe Pune RE prices in the core areas not getting too much correction is not only because of the behaviour of the builders, more importantly it has to do with the psychology of the people in Pune. Thats a typical characteristic of people in a tier-2 city which distinguishes with tier-1. And Pune has lots of other positives as well.
If India need to grow at 6%, folks like Pune have to achieve 10-12% no other choice. I guess i deviated from the original subject here, but it was necessary to make my point.
Ravi, great blog. Thanks for your raising such topics here.