Additional 25 Million Affordable Units Will Be Required By 2030: Reports
The latest RICS – Knight Frank report estimates that by the year 2030 more than 40 per cent of the Indian population will live in urban India as against the current figure of 34 per cent which is likely to create a demand for 25 million additional affordable units
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RICS (Royal Institution of Chartered Surveyors) in association with international property consultant Knight Frank today released a report, Brick by brick- Moving towards “Housing for All”. The current estimate of the housing shortage in urban areas is around 10 million units. Most of the housing shortage lies in the Economically Weaker Section (EWS) and Lower Income Group (LIG) segment. As of July 2019, 8.36 million houses have been sanctioned under the “Housing for All” initiative. Construction for 4.9 million units has begun and 2.6 million units of which have been completed. Given the past trend, additional 1.64 million houses are likely to be sanctioned by December 2019, making it highly possible to achieve the 10 million houses target by 2022. Projected subsidy disbursement over the next 3 year for the same is projected to Rs. 1 trillion.
The latest RICS – Knight Frank report estimates that by the year 2030 more than 40 per cent of the Indian population will live in urban India as against the current figure of 34 per cent which is likely to create a demand for 25 million additional affordable units. However, to address the huge demand, a subsidy-based approach may not be enough for maintaining sustained growth in the affordable housing segment. India’s urban housing shortage is being primarily driven by the EWS and LIG categories. An analysis of the demand-supply shows, that on an average, nearly 0.6 million homes are required every year in the top eight cities versus supply of 0.2 million units per year. There is a huge supply gap for urban housing and more so in the EWS and LIG category, i.e. houses with ticket size less than 2.5 million. Whereas, the demand in the EWS and LIG category is around 0.34 million.
Financing for affordable housing can be broadly classified into- debt, equity, and subsidy. From Fresh disbursals of HFCs and Scheduled Commercial Banks (SCBs), it is evident that the share of EWS sector in new disbursals has come down each financial year from 21 per cent in FY 2013 to just 10 per cent in FY 2018. Moreover, even the share of LIG sector in fresh disbursals has also declined from 39 per cent in FY 2013 to 33 per cent in FY 2018.