With over 4.2 million new units of housing property estimated to be in demand during 2016-2020, Delhi-NCR tops the list with over 1 million units. However, the supply is not expected to match such a high demand.
Despite assumption about further slowdown in the property market, realty outlook still seems promising for the period 2016-2020. According to a report titled “Revitalising Indian Real Estate: A new era of growth & investment” released by real estate consultant Cushman & Wakefield (C&W), a total of 4.2 million individual units of residential housing units are to be put in demand by the top eight Indian cities during the said period. As has always been, Delhi-NCR is leading the list with more than 1 million units to its name. This constitutes almost a quarter (24%) of the entire demand.
Estimates Units of Housing Property in Demand
- Delhi-NCR (NCT, NOIDA & Gr. NOIDA, Ghaziabad, Gurgaon, Faridabad) – 1,000,000 Units
- Mumbai Metropolitan Area – 711,000 Units
- Bengaluru – 686,000 Units
- Hyderabad – 518,000 Units
- Chennai – 444,000 Units
- Kolkata – 361,000 Units
- Ahmadabad – 245,000 Units
- Pune – 190,000 Units
However, in spite of such a huge demand, the ground reality is that the property market is able to supply only a little in excess of 1 million housing units, which may tend to push price up, provided the location of the property is able to attract buyers. Further, the Low Income Group budget housing demand will be hardly met as only 25,000 units are expected to be developed in this category against a high demand of 1.98 million units by 2020.
Anshul Jain, Managing Director, India, Cushman & Wakefield said,
“At the ground level, despite demand grossly outstripping supply, there is a considerable proportion of unsold inventory in the MIG and HIG categories, which are not absorbed as these properties are unable to demonstrate value for their buyers. Such units fall out of preference either on account of higher-than-expected prices or due to locations. Lack of funds and high land and development costs are the primary reasons for developers not opting for smaller sized units closer to city centres as profitability drastically reduces…”
High land and development costs combined with lack of funds are the main reasons for which realty developers are not going easily for smaller units. On the other hand, they are targeting more on the HIG and MIG units due to comparatively higher profitability. Buyers are also cautious about choosing the location of the property. Many unsold inventories are still getting piled up as they are unable to demonstrate value for their buyers or the value seems higher-than-expected prices considering their locations.