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Housing VITAL STATS supply is likely to be around 203,000 units. Middle Income Group (MIG), highest demand generator, 1.08 million units by 2018 Of the total demand, majority (46 per cent) Mumbai to witness an additional demand of around 231,000 units across all segments is likely to arise in the MIG, followed by 33 by 2018-end while the supply is likely to be around 203,000 units per cent in the LIG and 21 per cent in the Delhi-NCR to witness maximum estimated demand of 818,600 housing units across HIG. However, the supply seems extremely all segments skewed towards the HIG (63 per cent), and Kolkata to witness lowest demand of less than a lakh units in the next 5 years across likely to exceed demand significantly. As a all segments result, due to excess supply in one segment, Around 23 per cent of urban housing demand in India is likely to be concentrated the overall demand-supply gap seems across the top eight cities. Top 8 cities to witness demand for nearly 520,000 High reduced but a large portion of the MIG and Income Group (HIG) units during 2014-2018 LIG demand will remain unaddressed. Scarcity of land in the island city has led relaxation in FDI norms to attract more 2012 estimates, demand resulting from to residential housing developments in investments in to the sector (with higher such housing shortages was around 18.78 the suburbs and peripheral locations of exemptions for affordable housing projects). million units in the entire country. Mumbai. With increasing demand, land Further the cause, RBI has also announced costs have risen sharply and the developers that affordable housing is now a priority AHMEDAbAD are finding it difficult to launch the LIG and sector, enabling banks to raise cheaper MIG projects at many locations. Although credit for such projects. Additionally, it also the developers have launched projects incentivised individual loans upto `50 lakh targeting the MIG in far-off and peripheral (for houses valued up to `65 lakh) in metros locations, the overall physical and social such as Delhi, Mumbai, Kolkata, Chennai, infrastructure at these places has not Bengaluru and Hyderabad and loans upto supported these residential developments `40 lakh (for houses valued up to `50 lakh). In the next five years (until 2018), new and the demand has remained subdued. The government’s impetus on the demand housing demand of 248,000 units is likely side consists of increasing the Income Tax to arise in Ahmedabad, of which nearly bENGALUrU exemption limits and the exemption limits 46 per cent is slated to be in the LIG, 42 for payment of interest on home loans to per cent in the MIG and remaining 12 per lure homebuyers. cent in the HIG. Due to high growth in Whilst these policy measures are really manufacturing setups in the peripheral welcome, they are not enough to address regions of the city and presence of well- the huge demand-supply gap that has established trading activities, there is a been projected until 2018. The current phenomenal rise in housing demand from With 243,000 units expected supply in the estimates are based on population growth both current inhabitants and increasing next five years (until 2018), Bengaluru’s and supply trends of the past decade. migrant population. residential market is likely to remain highly We still have to gear up for the massive Expected supply in the next five years active in the future periods as well. The city industrialisation that will take place through seems to be highly skewed towards the being a prominent IT-ITeS hub of South the development of the planned industrial MIG with 78 per cent offerings in this India attracts workforce from India as well corridors and the smart cities that will be segment. Even with this kind of supply as abroad, leading to massive housing developed. Specifically, the government infusion, the demand-supply gap in the needs. As per supply projections, nearly 56 needs to focus on increasing the capacity MIG is significant and Ahmedabad per cent of new units may cater to the MIG, of the private sector to increase the supply features in the list of top cities having a 29 per cent to the LIG and remaining 15 per manifold by removing all bottlenecks in shortfall of housing units catering to the cent to the HIG. The cumulative demand for acquiring land, regulatory processes, raw MIG. In addition, the LIG demand seems residential housing (until 2018) is projected materials, finances, etc. to meet its goal of completely unattended with a massive to be 438,600 units with 44 per cent in the housing for all by 2022. cumulative gap of around 107,000 units. MIG and 31 per cent in the LIG. Considering The additional or new demand that is the high requirements, demand is likely to expected to be generated in 2014-2018 MUMbAI remain unmet in all segments with a total is calculated based on the past trends demand-supply gap of around 196,000 of population and household growth units with a high paucity (38 per cent of and the income classification for the total shortfall) in the HIG. Bengaluru has households. Hence, this does not take remained focused on the MIG, primarily into consideration, existing unfulfilled due to the large-scale mid-level IT demand of those without homes, living in workforce in the city. However, as the city congested homes and or in dilapidated Mumbai is expected to witness an attracts larger global corporations with structures. As per the Ministry of Housing additional demand of around 231,000 units headquarters of many companies being & Urban Poverty Alleviation’s (MHUPA) across all segments by 2018-end while the located in Bengaluru and incomes rise, the 24 construction opportunities|NOVEMBER 2014
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