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Monday, October 28, 2013

Chennai Housing 2013-17: Supply - Demand Gap would be 81 %


Housing Demand Exceed Supply by 45 % across 8  Cities in the next 5 years.

According to Cushman & Wakefield survey, Tamilnadu capital city Chennai's residential housing demand is expected to be nearly 3,14,000 units in the midrange and high-end categories in the next five years (2013-17).

Chennai's traditional importance as an economic hub and educational centre of South India remains unchanged. This,along with the increase in industrial activities is driving demand for housing in the city.



Highlights of  Cushman & Wakefield Survey..

 a A report by Cushman & Wakefield estimates that the total new housing demand will be about 1.20 crore (12 million) units in the next five years (2013 -17 ).This is based on the estimated growth of population across India and in major cities.

a Of the Pan India additional demand, the top eight (8)  cities such as NCR (including Delhi,Gurgaon & Noida), Mumbai, Pune, Ahmedabad, Bengaluru, Chennai, Hyderabad and Kolkata will constitute about 23%.

a Of the total demand in the top 8 cities, Middle Income Group (MIG) and Higher Income Group (HIG) categories constitute a majority of the demand at 25 lakh units.

a Demand for Lower Income Group (LIG) will be relegated to a mere 3 lakh units in these 8  cities, due to increase in housing and income standards that are expected to be witnessed in these key economic centres of India.

a Of the total demand in both segments in Chennai, about 90% of the additional demand in the next  5 years is expected to be in the MIG category. Currently, there is limited project pipeline visible as developers / promoters are cautious in making new project announcements. Since most residential projects have a construction timeline of about 36 months to 45 months, it is expected that more projects may be launched in due course that can help reduce the gap.

a The report indicates that housing demand will actually exceed supply by 45% across 8 major cities in the next five years.

a Construction costs will also continue to increase and affect pricing. NCR will see the highest demand in the country in the mid- and high-end segments during 2013-2017.

a In the NCR, the gap is expected to be about 22% or 1,70,000 units over this period. The MIG segment comprises units of 600 to 1,400 square feet priced in the Rs. 15 lakh to Rs. 80 lakh range. In Mumbai and NCR the upper limit could go up to Rs 1 crore.

The HIG segment refers to houses of more than 1,400 sq. ft priced over Rs 80 lakh or Rs 1 crore depending on the city.

Chennai Housing : 2013 - 17 Supply  and Demand Gap

City
Demand
Supply
Supply –
Demand 
Gap (%)
Chennai    
3,14,442
59,920
81 %

                           


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