Top eight cities, including NCR and Mumbai, would witness an additional housing demand of 2.8 million units in the next five years, but supply will lag behind due to economic and regulatory issues, says property consultant Cushman & Wakefield.
"The total new housing demand across India country will be nearly 12 million units in the next five years (2013-17). This is based on the estimated growth of population across India," C&W said in a statement.
The top 8 cities will constitute about 23 per cent out of the total demand. These cities are National Capital region (NCR), Mumbai, Kolkata, Chennai, Hyderabad, Bangalore, Pune and Ahmedabad.
"Of the total demand in top eight cities, middle income group (MIG) and higher income group (HIG) categories constitute majority of the demand at 2.5 million units," the consultant said.
The demand for lower income group (LIG) will be a mere 3,00,000 units in these 8 cities, due to expected increase in the housing and income standards in these key economic centres.
The gap between cumulative supply and demand in HIG and MIG segments during 2013¿ 2017 is estimated to be about 45 per cent in the top eight cities.
The supply of housing units in MIG and HIG during 2013-17 is expected to be around 1.4 million units in the top 8 cities and of this nearly 1 million units would be in MIG category and only about 4 lakh units will be in the HIG category.
"The gap between fresh demand and supply is expected to see an incremental expansion as supply will fall short on account of economic, regulatory and political scenario," C&W Executive Managing Director (South Asia) Sanjay Dutt said.
However, he noted that some of the demand in the next couple of years can be met through the existing vacant stock.
"While demand for housing units will grow proportionate to the rise in population, supply is expected to be less aggressive in the short to medium term," Dutt said.
The new regulations like land acquisition bill and real estate regulatory bill which are expected to come into force in the next few quarters will stagger supply, he added.
In the NCR, the consultant has projected the demand and supply in HIG and MIG categories during the next five years at 7,77,917 units and 6,06,274 units, respectively.