Mumbai to see demand for 6.51 lakh housing units in 5 yrs: Report

The demand growth will be the most in Mumbai at a 14 per cent compounded annual growth rate (CAGR),followed by NCR at 11 per cent and Bangalore at 10 cent. These tier 1 cities are expected to witness the most demand due to significant population migration. In absolute terms,however,NCR is expected to record the highest demand of over 7 lakh units followed by Mumbai,which will see a demand for 6.51 lakh units as against an estimated supply of 2.4 lakh units for the five-year period. While the housing shortfall in the top seven cities is pegged at 130 per cent,the affordable housing segment is estimated to suffer the most as it is predicted to witness a demand three times more than the supply.

“Although,the market looks positive in the medium term with considerable demand across sectors,the industry seems to be affected by the rising interest rates,rise in construction costs and inflation,” said Anurag Mathur,managing director,Cushman and Wakefield. He added that in the long term,the sector will continue to witness robust demand.

According to the report,the anticipated demand is likely to exert an upward pressure on property prices,especially in markets like NCR,Mumbai and Bangalore,where the demand-supply gap is high. On the other hand,in the tier II cities,such as Pune and Hyderabad,prices will appreciate at a slower pace due to a more abundant supply. However,the price increase even in tier 1 cities would be only in the medium term i.e. two to five years,said Shweta Jain,director,Residential Services.

“We do not foresee any immediate increase in rates. In fact,certain micro-markets within Mumbai,such as Lower Parel,will see a 10-15 per cent correction in prices. We have had prices reaching the peak levels and now they will start rationalising,” said Jain.