Demand for affordable homes is set to stay healthy, with the market poised to hit the Rs 6.25 lakh crore mark by 2022, supported by a growing population, young demographic profile, shift towards nuclear families and rapid urbanisation, according to rating agency ICRA.
Wide disparity in household income, end-user driven market and high home prices will aid the growth of this segment, the agency said.
“The housing shortage is expected to increase from the current level of 19 million units to 25 million by 2021, based on a stable decadal growth rate. Assuming an average ticket size of Rs 25 lakh per unit, this translates into a market potential of Rs 6.25 trillion (lakh crore) for affordable housing projects,” said K Ravichandran, Group Head, Corporate Ratings, ICRA.
Limited supply in low cost and affordable housing segments, largely being catered to by the government undertakings or the smaller and unorganised developers, has resulted in an acute shortage of housing. Various incentives to homebuyers targeted at the affordable housing segment are expected to further augment the demand, according to ICRA.