Affordable housing to drive real estate growth, says Raheja
The existing shortage plus upcoming demand for affordable housing segment in India is estimated to be 30.7 million units by 2030, a Rs.44 trillion financing opportunity for the sector https://www.bseindia.com/.
“Affordable housing is both a pressing challenge and an opportunity to drive India’s real estate growth,” said Neel Raheja, Chairman, CII National Committee on Real Estate & Group President, K Raheja Corp.
“As urbanization accelerates, bridging the housing deficit through innovative strategies and collaborations is imperative,” he added at the launch of a report ‘Affordable Housing in India: Demand-Supply Assessment and Financing Opportunity’ on 4 Dec.
It was launched by Confederation of Indian Industry (CII) and Knight Frank during the CII Conference on Indian Housing Landscape – Affordable to Accessible.
The report will act as a catalyst for fostering impactful discussions and shaping the future success of the real estate sector, said Raheja.
As per Knight Frank analysis, led by factors such as urbanisation and employment opportunities, 22.2 million units of housing will be required in urban centres in India. 95.2% of this demand, which is equivalent to 21.1 million units, will be concentrated in the affordable housing segment https://www.nseindia.com/.
A predominant share of 45.8% of the demand will be concentrated amongst the EWS households. There is already an existing shortage of 10.1 million units.
According to the analysis by Knight Frank India, the cumulative affordable housing demand in India is projected to reach 31.2 million by 2030, with the market size estimated at Rs.67 trillion https://www.conexpoconagg.com/.
The current portfolio of the affordable housing loan market in India is estimated to be Rs.13 trillion, with Housing Finance Companies (HFCs) constituting Rs.6.9 trillion and Scheduled Commercial Banks (SCBs) holding a share of Rs.6.2 trillion https://www.globaltenders.com/.
The loan market in this category is anticipated to experience significant expansion due to the escalating potential demand for affordable housing https://sbi.com.in/.
The reliance on loans is notably high in the affordable housing segment as compared to premium in India. Based on an assumption of a 77% loan dependency and Loan-to-Value (LTV) ratios applied at various loan thresholds, the potential financing opportunity for banks and Housing Finance Companies (HFCs) in the affordable housing segment is estimated to be Rs.45 trillion.
Between 2011 and September 2024, the affordable housing segment attracted capital inflows of US$1.6 billion. This represents just 9.8% of the total capital directed towards the residential sector and a mere 3.6% of the overall real estate sector inflows. The limited inflow of foreign funds has been a key factor, with foreign investments accounting for only 15% of the total private equity inflows into affordable housing http://mohua.gov.in.
Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “India’s affordable housing sector is set to witness a dramatic surge, with a shortage and anticipated demand reaching 30.7 million units by 2030 https://ted.europa.eu/en/.
“This demand will largely stem from urban centres, driven by the needs of economically weaker section (EWS) households. As urbanisation accelerates and income levels rise, affordable housing is positioned to play a pivotal role in shaping the country’s real estate landscape.
“Addressing this demand will require innovative strategies, including public-private partnerships, policy interventions, and advancements in construction technologies, making affordable housing not just a social imperative but also a critical driver of economic growth.” fiinews.com
