The urban housing deficit in India today stands at 1.9 crore units, of which 95% is in the low-income segment, translating into a financing opportunity of INR 9.5 lakh crore. This deficit is expected to widen to 3.8 crore units by 2030 if immediate measures are not taken. In the rural sector, the housing shortage is estimated at 4 crore units, translating into an immediate financing opportunity of INR 12 lakh crore. Together, the deficit stands at INR 21.5 lakh crore, making India one of the world’s least penetrated markets as far as affordable housing finance (AHF) is concerned.
There is an annual demand of 9 million homes, versus a supply of 1 million, implying a growing need. This huge unmet need has caused a significant increase in affordable housing activity, and a sample study across 22 Indian cities indicates the launch of 132 such projects.
The regulatory impetus to such activities comes from the Government of India’s campaign “Housing for All by 2022” to aid the affordable housing industry; lowering of risk weights for housing loans (further from 50%); 41 HFCs getting SARFAESI license; and a revision in on-lending and interest caps by the National Housing Bank.