Business EconomyPosted at: Dec 4 2024 5:18PM


Affordable housing market in India set to reach Rs 67 Trillion by 2030: Report

Kolkata, Dec 4 (UNI) Affordable housing segment in India is estimated to be 30.7 mn units triggering opportunities to finance is calculated to be Rs 44 trillion by 2030, according to Knight Frank, the country's leading real estate consultancy.
In its latest report ‘Affordable Housing in India: Demand-Supply Assessment and Financing Opportunity’ launched during the CII Conference on Indian Housing Landscape – Affordable to Accessible observes that the existing shortage plus upcoming demand for affordable housing segment in India is estimated to be 30.7 mn units by 2030. The opportunity to finance 30.7 mn units is calculated to be Rs 44 tn.
As per analysis, led by factors such as urbanisation and employment opportunities, 22.2 mn units of housing will be required in urban centres in India. 95.2 percent of this demand, which is equivalent to 21.1 mn units, will be concentrated in the affordable housing segment.
A predominant share of 45.8 pc of the demand will be concentrated amongst the EWS households. There is already an existing shortage of 10.1mn units. According to the analysis, the cumulative affordable housing demand in India is projected to reach 31.2 mn by 2030, with the market size estimated at Rs 67 tn.
The current portfolio of the affordable housing loan market in India is estimated to be Rs 13 tn, with Housing Finance Companies (HFCs) constituting Rs 6.9 tn and Scheduled Commercial Banks (SCBs) holding a share of Rs 6.2 tn. The loan market in this category is anticipated to experience significant expansion due to the escalating potential demand for affordable housing.
The reliance on loans is notably high in the affordable housing segment as compared to premium in India.
Based on an assumption of a 77 pc loan dependency and Loan-to-Value (LTV) ratios applied at various loan thresholds, the potential financing opportunity for banks and Housing Finance Companies (HFCs) in the affordable housing segment is estimated to be Rs 45tn.
Between 2011 and September 2024, the affordable housing segment attracted capital inflows of USD 1.6 billion. This represents just 9.8 pc of the total capital directed towards the residential sector and a mere 3.6 pc of the overall real estate sector inflows. The limited inflow of foreign funds has been a key factor, with foreign
investments accounting for only 15 pc of the total private equity inflows into affordable housing.
Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, "India's affordable housing sector is set to witness a dramatic surge, with a shortage and anticipated demand reaching 30.7 million units by 2030. This demand will largely stem from urban centres, driven by the needs of economically weaker section (EWS) households.
As urbanisation accelerates and income levels rise, affordable housing is positioned to play a pivotal role in shaping the country's real estate landscape. Addressing this demand will require innovative strategies, including public-private partnerships, policy interventions, and advancements in construction technologies, making affordable housing not just a social imperative but also a critical
the driver of economic growth.”
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