Housing demand in India is projected to reach 93 million houses by 2036, owing to the increase in demand in housing due to growth in key parameters including population in both urban and rural areas, healthy macro-economic indicators and favourable demographics, with several tier two and three cities projected to spearhead both demand and supply.
A report by CREDAI in collaboration with Liases Foras said that the next wave of real estate growth will come from tier two and three cities. Around 44 per cent of the 3,294 acres of land that were acquired by real estate developers were in these regions “signaling a growth of the real estate sector in these cities at a much more rapid pace than expected,” said CREDAI president, Boman Irani.
Currently on a pan-India basis, the unsold inventory in India was 10.4 lakh units, that is down three per cent sequentially but two per cent higher on year. Of the total unsold inventory, over one-fourth is due to stalled projects most of which were launched prior to 2016. Over one-fifth of the unsold stock is in the Mumbai Metropolitan Region, which is the largest residential market in the country.
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As of September-end, tier two cities experienced a notable inventory decline, standing at 20 months, contrasting with the national average of 26 months
While the national average shows a six per cent annual price growth, smaller cities like Bhopal, Lucknow, and Coimbatore have witnessed significant spikes exceeding 20 percent.
The government’s focus on “housing for all” is influencing developers to prioritize affordable and lower-income segments. “Housing in such cities will witness a sharper trajectory as crucial Government Programs and increasing commercial activities come to the forefront to create a strong pipeline of projects across all segments,” said Irani.