Continued population boom in India leads to a situation where residential units or space remains insufficient for the people. According to Cushman and Wakefield all major cities of India are in high need of around 2.1 million new housing units to meet the increased demand. Real estate sector has to come up with new residential projects to solve out this great menace. Real estate has to play a vital role.
Cushman & Wakefield added that eight largest cities of India will share 18% of the total demand. Chennai, Mumbai, Pune, Bangalore and Kolkata are included in the largest residential -units -demanding cities. Leveling economic growth along with the population explosion make more dwellers attracted to these cities. More settlers caused population density and invited higher demand.
Real estate consultants revealed that the next five years will increase the demand for more than 2.1 million housing units in the major cities alone. Cushman and Wakefield continued that around 50 % of this demand will be for the mid-income segment properties.
It is estimated that around 12 million housing units will be on demand by the year 2016. Notably the figures are based on the previous trends of population and the growth of houses. Income classification for the households is another base for this figure.
Approximately 59% or around 1.3 million housing units will be demanded by the mid income group. This is the figure of the previously said eight top cities where higher end market will demand 451,000 units and the lower segment demanding 362,000 units.
Sanjay Dutt, the executive MD (managing director) of Cushman & Wakefield India opinioned that higher demand in these leading cities is reflection of their economic security and strength. Economic strength is the pulling factor of population migration to these cities. Increased demand in the middle ranged housing units explains the fact that these cities contain an economically viable population.
The increase for housing units is believed to increase at a CAGR (Compounded Annual Growth Rate) of 2.8% across India. But the same seems to be 4.1% in Bangalore which stands ahead to Pune and Hyderabad which stand second and third positions respectively. A demand of maximum 381,000 units by mid and high end segments from 2012 to 2016 is expected by the NCR.
338,546 units by Bangalore and 257,796 units by Chennai and another 199,575 units by Hyderabad make the South noticed. Around 45% of the total demand is from the mid and high end sectors. 188,708 units are expected to be demanded in Mumbai by the middle and high segments. Ahmedabad might see a maximum demand of 173,394 units, Pune 144,422 units and Kolkata up to the maximum of 77,000 units.
Mr. Dutt explained further that these increased demand as an indicator to the expected financial stability of these cities. Majority of this demand is coming from the service sector of these cities. Both Chennai and Pune are expected to gain this higher demand from both service as well as manufacturing sectors.
Most number of luxury homes is demanded in Gurgaon. Some ultra –luxurious housing units were sold at Rs30, 000 per square foot. At the same time some other high end projects were sold at Rs14, 000 per square foot. Meanwhile Greater Noida was placed at the other end. High end apartment projects are sold at a price around 6,000 to 8, 000 per square foot.
Anyway the future needs more number of housing units to satisfy the surging demand of the increasing population. Only real estate growth can be helpful at this juncture.