India needs to build 30K units daily for 8 years to meet housing needs: KPMG report

National Real Estate Development Council

India will require to build at least 30000 to 35000 dwelling units daily for 8 years to meet the housing needs of the country, says the National Real Estate Development Council (NAREDCO) report.

A majority of these houses need to be in the affordable segment requiring investment of more than US$2 trillion since a fifth of urban and rural households have limited access to housing facilities.

It is estimated that in the next eight years, India needs to invest more than Rs 125 trillion (USD2 trillion) at current prices to meet its housing needs, which is over Rs 16 trillion (USD260 billion) per annum.

“Large-scale development of affordable housing projects is still a challenging proposition for many private developers,” it said. The current housing shortage in urban areas is estimated at 19 million units. Of this, about 95.6% is estimated to be from economically weaker sections (EWS) and low income group (LIG) households, who cannot afford houses costing above Rs 15 lakh.

“A major issue in the real estate sector, which has increased risk affecting the availability of liquidity is the widening of the real estate project life cycle. A project today takes anywhere between seven and eight years, of which about 20%-30% of the capital investment happens in the initial years. Liquidity from formal channels is available only for four to five years, and that too at the start of construction. Thus, the lack of long-term capital in the sector could be restricting entry of new players into the market,” Said Neeraj Bansal, KPMG India head real estate and construction.