New Delhi: India is facing a shortage of up to 70 million residential units, as high economic growth and rapid urbanisation spurred overall demand for housing, says World Bank.
Also, the South Asia region has about 30 million middle and lower class households willing to pay but are “unable to have access to mortgages,” said the Bank report titled ‘Expanding Housing Finance to the Underserved South Asia´.
“In India alone, estimates of the housing shortage range from 20 million to 70 million yet as much as half of this excess demand can be profitably serviced by the housing and housing finance markets,” the multilateral lender noted.
Deficiencies in financial systems should be eliminated to ensure long term funding opportunities for mortgage lenders and developers, it added.
The report pointed out that it might be “commercially viable” in India to build housing units for 23-28 million households -- representing 35 to 45 % of country’s urban population -- whose monthly household incomes are in the range of Rs 5,000-11,000.
“High economic growth coupled with rapid urbanisation and a rising middle class have created considerable demand for housing and housing finance in South Asia,” World Bank said.
Going by estimates, nearly a quarter of the world’s population lives in South Asia comprising India, Pakistan, Bangladesh, Sri Lanka, Afghanistan, Bhutan, Nepal and Maldives. The latest report covers the first five nations.
Over 14% of South Asians are believed to have no home and that figure excludes 45% of the region’s people living in overcrowded conditions.
However, the report pointed out that housing and housing finance services have the potential to expand to middle and lower income families.
“This requires improved land administration, strengthened legal framework for all aspects of housing and promotion of long-term funding for mortgage lenders and developers,” Tatiana Nenova, co-author of the report, said.
The report noted that in fast-growing economies, housing sector has the capacity ot grow at “considerable speed” and could generate 3.2 million jobs over a decade.