Demand for real estate in future will be primarily in urban areas with affordable housing, office space and commercial space driving the boom, according to a report titled India 2030- Exploring the Future, by the Confederation of Real Estate Developers Association of India (CREDAI) in association with global property consultant CBRE.
The report says that, increasing shift to the cities will see a corresponding rise in demand for affordable housing. “Affordable housing will remain the dominant segment in the coming years, with a total of 10 million PMAY (U) units to be delivered by 2020 itself,” says the CREDAI-CBRE study. It also foresees rapid urban growth in office space from 600 million square feet in 2019 to one billion square feet by 2030.
The trends clearly point in this direction, experts agree. “Lines between urban and rural areas are blurring. More cities are attracting people, in larger numbers than before, and this is driving some of the growth,” said Samson Arthur, branch director, Hyderabad, property consultancy Knight Frank India. He believes that, migration drives the growth of infrastructure and it creates a conducive climate for real-estate developments
The findings of the report may even withstand the current stagnation in the real estate sector caused by the non-banking financial company (NBFC) crisis, according to Pankaj Kapoor, managing director at realty consultancy Liases Foras.
“Right now there are no investors for affordable housing but the segment will still be a dominant one and do well in the smaller cities in the near future,” feels Kapoor. In the face of a possible economic slowdown office space will rely on a recovery in the overall economy, says Kapoor.
There are other serious challenges too. The report cites that by 2030, India’s urban population will contribute as much as 75 per cent of the GDP but this projection can only become a reality if the pressure on the physical and civic infrastructure systems is eased.
Most Indian cities lag on key quality of life parameters and are plagued by challenges such as poverty, lack of affordable housing, traffic congestion, overcrowding, environmental degradation and air pollution,” the report points out.
In order to have more liveable cities it goes on to say, “The government needs to spend spend 7-8 per cent of its GDP on infrastructure annually to boost public and private investment in infrastructure.” Some solutions to the infrastructure problems need to be done on a much wider scale, says Rohit Poddar, managing director, Poddar Housing and Development and joint secretary of NAREDCO Maharashtra.
“The issue of parking spaces in metro cities like Mumbai is being addressed by solutions like vertical lots. Considering the rising demand for amenities and concern over security, developers are coming up with the township-led projects which is self-sustained with all the basic amenities. Townships and gated communities in the peripheral regions of the metros are seen as possible avenues to satiate the demand for a home with social amenities and security arrangements at an affordable price,” he said.