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The immediate outlook in housing supply may indicate that demand is yet to catch up, resulting in over-supply. But this is set to change, according to a report by real estate property consultants Cushman & Wakefield.
The report indicates that housing demand will actually exceed supply by 45 per cent across eight major cities in the next five years.
This will primarily be due to a drop in supply while demand continues. Supply will fall short on account of the economic, regulatory and political scenario while demand is bound to sustain as population rises.
According to Cushman & Wakefield, new regulations such as the land acquisition law and the real estate regulatory law are expected to come into force in the next few quarters and will moderate supply.
Construction costs will also continue to increase and affect pricing. NCR will see the highest demand in the country in the mid- and high-end segments during 2013-2017. In the NCR, the gap is expected to be approximately 22 per cent or 1,70,000 units over this period.
The MIG segment comprises units of 600 to 1,400 square feet priced in the Rs 15 to 80 lakh range. In Mumbai and NCR the upper limit could go up to Rs 1 crore.
The HIG segment refers to houses of more than 1,400 sq. ft priced over Rs 80 lakh or Rs 1 crore depending on the city.
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