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India’s Tier II Cities See A Spike In Senior Housing Demand; Market Expects To Grow 5 Times By 2030: Report

The current supply of senior housing units is just one per cent, or around 20,000 units, of the total demand; the market is expected to grow five times by 2030, says a Colliers report.

May 14, 2024
May 14, 2024
Growth of housing Market by 5 times

Growth of housing Market by 5 times

India’s senior housing market is expected to grow five times by 2030 with increasing demand for senior homes driven by higher life expectancy, growing income levels, lifestyle changes, nuclear families, and desire to live independently, according to a report by US-based real estate consulting firm Colliers. The May 13, 2024, report predicts the senior population to increase from 11 per cent to 21 per cent by 2050, with the median age rising from 29 to 38 by 2050.

Also Read: What Is Senior Citizen Card And How To Apply For It In West Bengal?

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Badal Yagnik, chief executive officer, Colliers India, says in the report, “Like most emerging market economies, the demographic pattern of India is undergoing a steady yet definite shift. The population pyramid will slowly but surely transform from the current expansionary stage to a more stable state in the next few decades. The current nascent senior living market presents a lucrative opportunity for private organised developers to capitalise on the untapped market. With rising interest from institutional players and leading real estate developers, senior housing in the country is set to be almost 5x times by 2030, compared to current levels.”

 

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While the demand for senior housing is in lakhs, the current supply is only around 20,000 units, or just one per cent of the total demand. Evidently, there is a huge gap in supply, and thus significant growth is expected in this segment in the coming years. Senior housing complexes provide facilities like fitness centres, recreational spaces, assisted living facilities, etc.

 

Says Vimal Nadar, senior director and head of research, Colliers India, “While currently the senior living market size in India is estimated to be about $2-3 billion, it is expected to witness a CAGR (compound annual growth rate of more than 30 per cent and reach $12 billion by 2030. Although the demand supply gap will remain high even in 2030, the penetration in senior living market has the potential to improve significantly in the long-term.”

The report discusses various aspects related to senior housing, which include:

 

Senior Housing Formats: Currently, private developers offer senior housing in two formats: Independent living (individual living without assistance) with “convenience of community living” and Assisted living, where the developer provides facilities, such as housekeeping in individual units, medical coordinators, physiotherapists, on-premise nursing attendants, emergency panic alarm response, professional society maintenance and management services. The major developers in this segment include Ashiana, Columbia Pacific, Paranjape, Anatara, and Primus senior living, according to the report.

Also Read: You Can Propose Another Person If First Nominee Dies In Life Insurance Policy, Add Riders To Boost Protection

High Cost: The segment is costly. An average house in independent senior living costs around Rs 1-2 crore. So, currently it mainly caters to the upper mid and high-end segment. Further, the supply is concentrated in southern India, so there is scope for growth in other parts. The report also highlights one more trend which is the demand for senior housing in Tier II cities. People prefer tier II cities like Coimbatore, Kochi, Ahmedabad, Surat, and Panaji because of the ease of living. A few other preferred cities include pilgrimage sites like Ayodhya, Dwarka, Vrindavan, and Rameswaram.

 

Scope Of Growth: To cater to demand across income groups, senior housing cost must be reduced, which according to the report can be done through technology, such as Building Information Modelling (BIM), artificial intelligence (AI), augmented reality (AR), 3-D printing, etc. Also, banks and other financial institutions can work to provide revolving credit and loan refinancing facilities to seniors or offer loans at lower interest rates to avail senior housing facilities. Further, insurance players and developers can explore partnerships to reduce the fixed component cost to make it affordable for the end-user. The report suggests that policy-level support and tax-based incentives for developers can encourage them to take up more senior living projects.

Also Read: What Are The Benefits Of Using Credit Cards For Senior Citizens?

Integrated Senior Housing: Additionally, a few developers are set to launch projects integrating general living and senior living in a single township. Under integrated housing, developers plan to dedicate a portion of the apartment towers in the township for senior living housing. A few developers like Wadhwa Group, Max Estates, and Adani Realty, according to the report, have announced plans for such projects in the next few years.

The report states that the demand for senior living is likely to increase amid the rising senior population. With foreign players entering the market, there will also come innovative offerings and pricing strategies in the senior housing segment. In the future, operator-based models, like co-living and co-working spaces, may also gain traction.

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