India's Affordable Housing Shortage to Hit 31.2 Million Units by 2030: CII-Knight Frank Report
The Confederation of Indian Industry (CII) and real estate consultant Knight Frank India have released a joint report highlighting the growing shortage of affordable housing in the country. The report, titled 'Affordable Housing in India,' projects a cumu
Affordable HousingReal EstateCiiKnight Frank IndiaHousing ShortageReal Estate MaharashtraDec 04, 2024
Ghulam Zia, Senior Executive Director of Research, Advisory, Infrastructure & Valuation at Knight Frank India, emphasized the business opportunities this shortage presents. 'The cumulative affordable housing shortage in India is projected to reach 31.2 million units by 2030, with a potential market size of Rs 67 trillion for real estate developers,' he stated.
The report also outlined several recommendations to address the shortage. These include the provision of additional free Floor Space Index (FSI) for affordable housing projects and tax incentives for developers. The report suggested that these measures could help stimulate the market and encourage more developers to enter the affordable housing segment.
The affordable housing sector also presents significant opportunities for financial institutions. Based on a 77% loan dependency and Loan-to-Value ratios, the potential financing opportunity for banks and Housing Finance Companies (HFCs) is estimated to be Rs 45 trillion. This represents a substantial increase, being three times the existing loan volume in this segment.
Vipul Roongta, MD and CEO of HDFC Capital, highlighted the importance of scale and effective marketing strategies for the affordable and mid-income housing segments. HDFC Capital focuses on financing homes below Rs 2 crore in Delhi and Mumbai, and below Rs 1 crore in other cities. Roongta mentioned that his company has already financed around 3 lakh homes and stressed the need to position affordable homes in a way that emphasizes quality and premium features, even if the homes are smaller in size.
The report estimates that 1.9 lakh acres of land would be required to build the projected 31.2 million housing units. It recommends the use of vacant Public Sector Undertaking (PSU) lands for affordable housing development under public-private partnerships. The demand for affordable housing is concentrated in income groups with an annual income of up to Rs 9 lakhs, categorized into Economically Weaker Sections (EWS) with an annual income up to Rs 3 lakh, Low Income Groups (LIG) with an annual income of Rs 3-6 lakhs, and Middle Income Groups (MIG) with an annual income of Rs 6-9 lakhs.
Frequently Asked Questions
What is the projected shortage of affordable housing units in India by 2030?
India is projected to face a shortage of 31.2 million affordable housing units by 2030, according to a joint report by the Confederation of Indian Industry (CII) and Knight Frank India.
What are the current recommendations to address the affordable housing shortage in India?
The report recommends the provision of additional free Floor Space Index (FSI) for affordable housing projects, tax incentives for developers, and the use of vacant PSU lands for affordable housing development under public-private partnerships.
What is the estimated market size for real estate developers in the affordable housing segment?
The potential market size for real estate developers in the affordable housing segment is estimated to be Rs 67 trillion by 2030.
What is the potential financing opportunity for financial institutions in the affordable housing segment?
The potential financing opportunity for banks and Housing Finance Companies (HFCs) in the affordable housing segment is estimated to be Rs 45 trillion, representing a substantial increase over the existing loan volume.
How is the demand for affordable housing categorized in the report?
The demand for affordable housing is categorized into three income groups: Economically Weaker Sections (EWS) with an annual income up to Rs 3 lakh, Low Income Groups (LIG) with an annual income of Rs 3-6 lakhs, and Middle Income Groups (MIG) with an annual income of Rs 6-9 lakhs.
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