Annual demand for affordable home market to touch USD 100 billion by 2023

Government estimates show the current shortage to be around 60 million housing units -- 20 million in urban areas and 40 million in rural. With estimated population of around 1.35 billion by 2022, and decrease in average household size from 4.8 to 4.4, the housing shortage is said to be 110 million units by 2022, most of them in the affordable segment. 

The PricewaterhouseCoopers (PwC), the National Real Estate Development Council (NAREDCO) and the Asia Pacific Real Estate Association (APREA), which did the study, estimates the market for this segment to be $100 billion p.a. over the next 5-7 years. Factors such as acute shortage of housing, more in the affordable segment (low-income and economically-weaker-groups), increasing urbanisation and growing economy have been highlighted as the reasons for this development. 

“Simplification of policies and processes, innovation in technology and financing will go a long way in attracting private sector participation and meeting the housing demand and retaining its affordability,” the study said. The affordable housing sector has seen a two-fold growth in new launches in the first half (January-June) of 2016 compared to the same period last year.

Although 17,000-plus affordable housing units were available in the top eight cities during the period, the report said the announcement of government schemes such as Pradhan Mantri Awas Yojna, Smart Cities and National Urban Housing and Habitat Policy had not overcome the challenges of demand and supply. 

“Complex and lengthy processes for pre-implementation stage including land conversions, building plan scrutiny, approvals and attaining construction permits are impacting project cost and time,” it said.