Hot spots for residential realty
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These cities also have other demand-raising and hence price-hiking drivers such as on going and planned projects in infrastructure, a growing service sector, manufacturing base, huge business investments and employment-generating opportunities.
The heightened economic activity in these regions could make them hot-spots for for the next wave of real estate investment. Compared to the ever-ballooning demand the supply is marginal at present. This widening gap that is not being filled fast enough, explains the slow but steady rise in property prices across all segments.
According to a report by the Ministry of Housing and Urban Poverty Alleviation, the current estimated shortage inclusive of existing and future demand is of 18.78 million urban houses. This total demand is expected to increase at a compounded annual growth rate (CAGR) of 2.8 per cent across India.
The HOT SPOTS
In one such study, the global real estate consultancy Cushman & Wakefield (C&W) India has reported that the new, future demand (not factoring in the existing demand) for residential dwellings in the period 2012 – 16 will be 11.8 million units across India.
The firm has identified the top eight cities, which will constitute 18 per cent or 2.1 million units of the total demand across categories. Of the total additional demand in these locations, the mid-priced segment is estimated to be highest at approximately 59 per cent or 1.3 million units, followed by demand in the high-end segment which is 4.51 lakh units.
"The demand creation in such cities is a reflective of the economic strength that these cities have, and that it attracts new settlers as well as creates conducive environment for natural population growth." says Sanjay Dutt, executive managing director, C&W, India.
The low-end segment is expected to see fresh demand of approximately 3.62 lakh units in these cities in the next five years. The top on the list of eight regions is Ahmedabad followed by Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, National Capital Region (NCR) and Pune.
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