Rising Middleclass in BRIC Nations Hugely Impacting the Affordable Housing Market Until 2020, Says Technavio

LONDON--()--According to the latest research report released by Technavio, the affordable housing market in BRIC countries is predicted to reach over 99 million units by 2020.

This report titled ‘Global Affordable Housing Market in BRIC Countries 2016-2020‘, provides an in-depth analysis of the market in terms of revenue and emerging trends. This market study also presents up to date analysis and forecasts for various market segments and all geographical regions.

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“The demand for affordable housing in BRIC countries was estimated to be close to 66.2 million units in 2015. Affordable housing provides the middle and low-income population with the opportunity to own independent houses. Also, governments in these nations provide benefits such as tax incentives to promote affordable housing development,” said Soumya Mutsuddi, one of Technavio’s lead industry analysts for construction research.

“Among the BRIC nations, India is a leading country to invest significantly on the construction of affordable housing for its population. The percentage share of India's urban population rose from 30.59% in 2009 to over 32.45% in 2015, which means there are around 412.3 million people residing in urban areas of the country. India’s urban population is expected to constitute more than 40% of the population by 2025, positively impacting affordable housing in the country,” added Soumya.

The key market drivers behind the growth of the affordable housing market in BRIC countries are:

  • Surging market demand for affordable housing
  • Operational ease and tax benefits

Surging market demand for affordable housing

With BRIC countries accounting for nearly half of the world's middle-class population, the demand for affordable housing has assumed critical implications in these countries. Factors spurring the market in these regions are rapid urbanization coupled with supportive policy measures from governments and regulators, and a rise in disposable incomes among the middle-class.

The banking sector in these countries is also fueling market growth by providing easy access to loans, thereby offering funding for affordable housing at reasonable interest rates. Along with these economic developments, socio-cultural factors like the growing number of nuclear families in India are also contributing to the market demand for affordable housing.

Operational ease and tax benefits

The economic crisis of 2008 has altered the way the developers operate in this market. During the pre-crisis era, developers used to operate in a different manner. First, a builder had to generate funds from investors for the acquisition of land. Once acquired, the investor had to collect liquid cash for the day-to-day requirements of the project. Excess funds were invested in new projects. However, the implementation of this model came with the risk of developers running short of funds during crucial stages of the project, leading to unnecessary delays and termination of partially completed projects.

In the post crisis era, real estate developers in BRIC nations have revamped their operational models and have started to emphasize on the concept of affordable housing. These housing projects do not require heavy investments and are easier to complete within a stipulated timeframe. In addition, favorable government policies have helped developers garner funds easily. The key policies being interest rate subsidies and tax allowances for construction in the residential sector.

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Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.

Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.

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Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 630 333 9501
UK: +44 208 123 1770
www.technavio.com

Release Summary

According to the latest research report released by Technavio, the affordable housing market in BRIC countries is predicted to reach over 99 million units by 2020.

Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 630 333 9501
UK: +44 208 123 1770
www.technavio.com