Housing market for senior citizens to grow 5x to $12 billion by 2030, report finds

Significantly, 60 percent of the demand for housing is likely to come from tier 2 and and spiritually-focused cities, according to the report

India’s housing market for senior citizens (senior living) has the potential to grow five times to $12 billion by 2030 from the current $2-3 billion as the country’s population turns older, a new report said on May 13.

“While currently the senior living market size in India is estimated to be about $2-3 billion, it is expected to witness a CAGR of more than 30 percent and reach $12 billion by 2030,” said Vimal Nadar, senior director & head of research, Colliers India.

The report said the median age of the country is likely to jump to 38 in 2050 from 29 in 2024 with the proportion of people aged 60 and above jumping to 21 percent by 2050.

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Significantly, 60 percent of the demand for housing is likely to come from tier 2 and and spiritually-focused cities, according to the report. Cities such as Ahmedabad, Surat, Coimbatore, Kochi and Panaji are witnessing a heavy demand for senior living, while Vrindavan, Ayodhya, Dwarka, and Rameswaram are favoured destinations for pilgrimage.

The demand for senior care, including housing, will see a significant growth in the country as India will account for 17 percent of the total population aged 60 and above, the report noted.

“Like most emerging market economies, the demographic pattern of India is undergoing a steady yet definite shift. The population pyramid of the country will slowly but surely transform from the current expansionary stage to a more stable state in the next few decades,” said Badal Yagnik, chief executive officer, Colliers India.

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This will provide an attractive opportunity for the private sector to capitalise on the untapped market, it said.

“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,” Yagnik added.

The demand for several services such as medical services, insurance, and housing has seen a steady growth recently. Factors like rising life expectancy, nuclearization of families, higher income levels, increasing importance of a stable post-retirement life and changing lifestyle are leading to higher demand for senior living in urban areas, the report said.

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According to the report, the current demand of 1.8 to 2 million units per year for senior housing is likely to grow manifold in the next 5-6 years. “Colliers estimates the current demand for senior housing at 18-20 lakh units, which is likely to increase significantly in the next five-six years. This growing demand creates lucrative opportunities for real estate developers and institutional investors.”

However, there is a significant demand-supply gap in the market. Currently, the organised sector provides around 20,000 units, which translates to a penetration of just 1 percent. In contrast, developed countries such as the United States, the United Kingdom, and Australia have established senior living markets with 6-7 percent penetration rate, the report said.

At present, private players offer apartments ranging from one to three BHKs or villas for independent living or assisted living. The average cost of such properties range within Rs 1 to 2 crore, the report found.