India’s real estate market is currently going through an existential crisis, with private developers rapidly leaving the affordable housing space. The country is, after all, home to the fastest growing urban population in the world. This rate of growth only further exacerbates the housing crisis and has led to a 66% increase in the emergence of slums in the world’s largest cities.
India’s urban population has been growing at an astonishing rate, fueling a massive housing need. The urgency to create affordable livable space has never been greater. Unfortunately, the supply now available isn’t meeting the demand with millions still without access. According to G Hari Babu, President of India’s National Real Estate Development Council, the skyrocketing land prices are raising the bar. These rising expenses are driving developers out of the market for affordable housing investments.
Land prices are increasing intensely across the board. Consequently, private developers find it financially unfeasible to develop homes that serve these lower-income families. This trend raises deep concerns about the future of urban housing in the country. Qualified builders are pulling out of affordable projects, and this turn would deepen the disaster of our continuing housing crisis. Consequently, slum communities near metropolitan cities could further grow.
The situation has garnered attention in media outlets, including CNBC’s “Inside India,” which airs Monday to Friday from 11:00 to 12:00 SIN/HK time and from 0500 to 06:00 CET. The segment sheds light on various pressing issues impacting the Indian economy, including the crisis in the real estate industry.
In a context where affordable housing is growing rarer by the day, the consequences for India’s urban future are catastrophic. Without major investment and changes of policy, the coming flood of new urban dwellers will have few good housing options. Private developers are retreating from this segment. In turn, housing market actors need to reconsider how they do business to serve this overwhelming demand.