Shortage of housing units hold realty prices high: CREDAI

Real estate sector in the country is unlikely to witness any price correction with a projected shortfall of 20 million houses, according to an estimate by the Confederation of Real Estate Developers’ Association of India (Credai).

“There is a documented shortage of 20 million units. Of this, 90% of the requirement is for EWS (economically weaker sections) and LIG (lower income groups). But this still leaves scope for 0.2 million units for the middle income groups,” said Geetamber Anand, president, Credai.

Echoing similar views, Irfan Razack, chairman of Credai, said, “There is no scope for prices to reduce. Land prices are not going down. Input costs are rising year-on-year. Plus, there are overhead costs and developer’s margins. The developers won’t sell their projects on loss nor are they making super normal profits.”

Razack is bullish on the growth of commercial real estate, citing it will grow on the back of IT and the information technology-enabled service (ITes) sectors.

“The states giving thrust to IT and ITes sectors will see consumption expanding. Growth in commercial real estate consumption is good for the economy since every 100 sq ft of space consumed creates one job,” he added.

Credai welcomed the Model Building By Laws of the Union government, saying it will give a boost to low cost, affordable housing.

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