The growing demand for affordable housing in the country is set to provide impetus to the segment, with the market estimated to touch USD 100 billion per annum over the next 5-7 years, a study has said.
According to the study conducted by PwC, Naredco and APREA, the market for this segment is estimated to be USD 100 billion per annum over the next 5-7 years on factors likeacute shortage of housing, especially in the affordable segment (low income and EWS groups), increasing urbanisation and growing economy.
"Simplification of policies and processes, innovation in technology and financing will go a long way in attracting private sector participation and meeting the housing demandand retaining its affordability," the study said.
According to government estimates, there is a current shortage of around 60 million housing units 20 million in urban areas and 40 million in rural.
With estimated population of around 1.35 billion by 2022, and decrease in average household size from 4.8 to 4.4, the housing shortage is estimated to be 110 million units by 2022, most of which would be in the affordable segment.
According to the study, the affordable housing sector has seen about two-fold growth in new launches in the first half (January-June) of 2016 as against the same time last year.
The total number of affordable housing units launched in the top eight cities during the period was recorded at over 17,000. The report further said that even though the government has introduced schemes like Pradhan Mantri Awas Yojna, Smart Cities and National Urban Housing and Habitat Policy, the sector faces demand-supply challenges.
"Complex and lengthy processes for pre-implementation stage including land conversions, building plan scrutiny, approvals, attaining construction permits, among others areimpacting project cost and time, thereby making it unviable to provide housing at costs affordable by the urban poor," it said. The report also said lack of adequate external infrastructure and connectivity is also responsible for making housing unaffordable.
"Therefore, there is a need to simplify policies and create more infrastructure to meet housing demand and make housing sector affordable," the study noted.