Cushman & Wakefield, Real Estate Consultant
PUNE: The city is expected to witness a 40% shortfall in the supply of housing units by the end of 2018. While it would require an additional 1,91,200 housing units, the supply is likely to be around 77,500 units, said a study conducted by global real estate consultancy firm Cushman & Wakefield (C&W) on Monday.
Of the total demand, majority (46%) is likely to arise in the Middle income group (MIG), followed by 33% in the Lower income group (LIG) and 21% in the Higher income group (HIG), said a Cushman & Wakefield report on Monday.
According to the study, the total housing demand in the country is expected to rise to 13 million units by the end of 2018.
"India's top eight cities, including Pune, Mumbai, Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad and Kolkata, will contribute 23 per cent or 2.65 million units to the total demand for urban housing, the study said.
The total demand for urban housing in India is expected to rise to 13 million units by the end of 2018 on account of the burgeoning population in urban areas, a study by global real estate consultancy Cushman & Wakefield (C&W) has said.
This would be in addition to the already existing unmet demand, and the total additional demand - 23% or 2.95 mn units, will come from the country's top 8 cities including Pune, the study said.
The study stated that 80 per cent of the additional demand for homes in these eight cities will come from the middle income group (MIG) and lower income group (LIG). In Pune, majority of the supply (72%) is planned in the MIG. However, there is likely to be a significant demand-supply gap (60% shortfall) for the LIG, which needs to be addressed by developing relevant housing units," the study said, adding that the expected supply of residential units, including under construction and planned pipeline, is estimated to be 1.31 million units which would be delivered across the top eight cities by the end of 2018.
Delhi-NCR is likely to have the highest supply of around 5,16,000 units delivered in the next five years, followed by Bengaluru with around 2,43,000 units and Mumbai with 2,03,000 units, the study observed.
Until 2018, the expected supply in the LIG will be approximately 21 per cent of the total supply across top eight cities, whilst demand constitutes 58 per cent share of the cumulative demand-supply gap. Delhi-NCR, Kolkata, Mumbai and Pune are expected to witness the highest shortfall in LIG units. The MIG accounts for 59 per cent of the total supply across top eight cities whilst it has a 23 per cent share in cumulative demand-supply gap. Cities such as Ahmedabad, Bengaluru and Mumbai are expected to lead the ranks of those with the shortfall of housing units catering to MIG.
HIG accounts for only 19 per cent of the total supply across top eight cities and has a 20 per cent share in cumulative demand-supply gap. Bengaluru, Chennai and Delhi-NCR are the leaders in cities with the highest demand-supply gap for HIG units.
Sanjay Dutt, executive managing director for South Asia at Cushman & Wakefield, said, "Private sector housing, which is largely responsible for creating housing in India, has been grappling with many issues such as rising input costs, expensive land valuations, outdated building norms, restricted access to funding, serious delays in regulatory processes and uncertain economic conditions resulting in poor and slow sales volumes. All of which have resulted in holding back the growth of this sector since the last 2-3 years. Consequently, the demand-supply imbalances across cities have been becoming more pronounced."
The study said the supply projected until 2018 end is only to the tune of 78,000 units, translating into a significant housing shortfall in the city.
With large global corporations deputing their top executives in the city, the demand in the HIG also seems to be on a rise and shortfall in this category also has to be addressed. Moreover, there is also a huge requirement by NRIs and buyers/investors from Mumbai looking to purchase an apartment in Pune as their second homes or retirement homes, the study said.