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7 Indian cities to see shortage of 2.3 mn homes
The demand for affordable housing in top seven Indian cities is likely to outstrip supply by 2015, according to global property consultant Cushman & Wakefield.
In its report 'Embracing Change -- Scripting the future of Indian Real Estate', C&W conducted the survey in the National Capital Region, Mumbai, Bengaluru, Chennai, Hyderabad, Pune and Kolkata for 2011-2015 period.
The real estate consulting firm found that the estimated demand for residential property in these cities is expected to touch 2.3 million units over the next five years while the estimated supply will be approximately 1 million units, leaving a shortfall of 130 per cent or over 1.3 million units.
The study further said the mid-range housing segment is expected to drive the maximum demand of 45 per cent.
"Majority of the developers in the top seven cities are concentrating on this segment, which would help reduce the supply-demand gap," it added.
Besides, the affordable housing segment is likely to register about three times more demand than supply and it will see the gap increasing during the next five years, C&W said.
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7 Indian cities to see shortage of 2.3 mn homes
1. National Capital Region
NCR is expected to record the highest demand for over 700,000 units.
The National Capital Region comprises the entire National Capital Territory of Delhi as well as parts of urban areas within the states of Haryana, Uttarakhand, Uttar Pradesh and Rajasthan.
The development of the NCR has given strong impetus to the development of real estatehere.
Tata Housing has recently come up with luxury property -- Raisina Residency and Primanti -- in Gurgaon.
It is the world's second largest urban agglomeration.
According to a recent Business Standard,in most areas of the NCR, prices have remained stagnant since the beginning of 2010.
For instance, in Noida, average property price hovered around Rs 3,341 a square foot, towards 2010 end compared to Rs 3,140 in January, a mere five per cent increase.
Prices went up by 1.48 per cent in New Delhi since the beginning of that year.
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7 Indian cities to see shortage of 2.3 mn homes
2. Mumbai
Mumbai is expected to record a demand of 6,51,000 units.
The city is also likely to record the highest compound annual growth rate of 14 per cent between 2011 and 2015.
According to realty research company PropEquity, home sales in Mumbai fell 35 per cent since the beginning of 2010 and 45 per cent since June that year.
Price is obviously the main factor.
Data show that prices in Mumbai city rose 28 per cent since the beginning of 2010 and 13 per cent since June in the same year.
Apart from steep price rise, the recent anti-inflationary measures by the Reserve Bank of India also hit home sales.
A mid-2011 Crisil study too indicated that residential property prices in Mumbai are likely to fall by 10 per cent.
The C&W survey, however, projects a reversal of this trend in the coming years.
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7 Indian cities to see shortage of 2.3 mn homes
3. Bengaluru
The city is expected to witness a demand for approximately 2,87,000 units.
The city may not remain India's 'Silicon Valley' for too long owing to its crumbling infrastructure and associated woes, said a recent study by the Associated Chambers of Commerce and Industry of India.
According to the survey, nearly 55 per cent of the IT companies based in Bengaluru are relocating their India headquarters to other cities.
Bengaluru is in danger of losing its crown to Gurgaon and Noida in the national capital region that are steadily becoming preferred destinations for companies offering IT, ITes, BPO, BTO and KPO services in various domains like banking, financial services, insurance, pharma, auto, FMCG and manufacturing.
The survey stated that the city is losing its sheen mainly because of crumbling infrastructure.
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7 Indian cities to see shortage of 2.3 mn homes
4. Chennai
According to a recent Business Standard report, with investments of $3 billion and a new national testing-R&D facility, the city is putting India on the global auto map.
Chennai is emerging as the country's largest automotive and auto components manufacturing hub in terms of investment.
Chennai, said Forbes magazine, is one of the fastest growing cities in the world.
It has a diversified economic base anchored by the automobile, software services, hardware manufacturing, health care and financial services industries.
According to the Confederation of Indian Industry, Chennai is estimated to grow to a $100-billion economy, 2.5 times its present size, by the year 2025.
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7 Indian cities to see shortage of 2.3 mn homes
5. Hyderabad
Hyderabad houses Google India's largest facility and Microsoft's biggest research and development facility outside the USA.
In addition, various biopharmaceutical firms have their operations in Hyderabad.
In 2008, the city's prime residential real estate reached the highest growth percentage
mainly because of an information-technology-driven boom in the 1990s.
A number of mega malls have come up or are being built in the city.
Many property developers like Godrej Properties, PBEL, Janapriya Properties, Ramky Estates have set up base in the city leading to a rapid increase in prices.
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7 Indian cities to see shortage of 2.3 mn homes
6. Pune
Many real estate developers are building properties in Pune. Among them, Tata Housing Development Company and ABIL deserve special mention.
TATA Housing is present in the city with its projects La Monatana and Inora Park.
There are many other builders who are considering Pune as a lucrative market for development of real estate primarily because of its closeness to Mumbai and the Express Highway.
It has a growing industrial hinterland, with many information technology and automotive companies setting up factories here.
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7 Indian cities to see shortage of 2.3 mn homes
7. Kolkata
In recent years, there has been a surge of investments in the housing infrastructure sector with several new projects coming up in the city.
Companies such as Tata Housing Development Company, DLF Limited and Unitech Group have invested a lot in the real estate in recent times.
Recently, adoption of 'Look East' policy by the government of India and an increased interest in the South East Asian countries to enter the Indian market have put Kolkata in an advantageous position for future development.