Affordable home segment presents a business opportunity worth USD 11.8 billion for developers across seven major cities of the country, according to property consultant Cushman & Wakefield.
Cushman & Wakefield (C&W) has pegged the demand for affordable housing at 5,35,400 units across Delhi-NCR, Mumbai (MMR), Bengaluru, Chennai, Hyderabad, Kolkata and Pune.
The consultant expects that strong demand pipeline in the top seven cities would drive private sector participation in development of affordable homes.
"Affordable housing demand across seven cities is around 5,35,400 units. Keeping in mind the high demand in this segment, it is time that developers change their perception about affordable housing development, since its success lies in the scale of operations, compared to the middle-income group (MIG) and high-income group (HIG) which have higher margins that drive profits," C&W said.
C&W executive managing director South Asia Sanjay Dutt said urban affordable housing has long been neglected in India due to various reasons such as high land prices, delays in getting approvals and low margins in the segment.
"Now with renewed focus from government, we expect this segment to gather momentum going forward," he added.
To fulfill the need for low-cost housing, the consultant said that the government needs to promote private sector involvement that would play a significant role in bridging the current deficit of low-cost housing in urban areas.
"Till now, private players have shied away from this segment, due to low margins. Incentivizing the sector by making land available, reducing raw material prices, providing additional Floor Space Index (FSI) for such developments etc. are bound to give a thrust to development of low cost housing units," the statement said.