HDFC Capital Advisors to Invest $2 Billion by 2030 on Affordable Housing

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With more and more people shifting locations for better living, India’s infrastructure industry is growing by the day. It is only expected that real estate giants like HDFC Capital Advisors join the fray. In an interview with ET, a high-ranking executive at HDFC Capital Advisors revealed that the company is making a significant investment in affordable and mid-income housing. The company plans to invest over $2 billion in this sector across India’s major property markets by 2025. This investment aims to alleviate supply-side constraints and demonstrate the company’s confidence in the potential of this market segment .

“The government has just announced support for three crore affordable houses including one crore homes in urban areas. This is a $500 billion business opportunity and would need investment of at least $100 billion that can be infused through public, private markets, and debt. HDFC Capital will continue to invest on the supply side of this segment,” Vipul Roongta, MD & CEO, HDFC Capital Advisors, quoted ET in an interview.

HDFC Capital Advisors is set to inject a significant boost into India’s affordable and mid-income housing sector, with plans to invest at least $1 billion annually over the next two years. The fund will target the top 15 cities, including Mumbai, Delhi-NCR, Bengaluru, and Hyderabad, among others. In the last six months alone, the company has already committed $1 billion to affordable and mid-income housing projects, underscoring the immense demand for capital in this segment.

“Contrary to the current perception of premiumisation of the property markets in India, demand for affordable housing will continue for long and will not ebb anytime soon. As per industry estimates, the affordable housing shortage in urban India is around 35 million units by 2030,” Roongta said.

Roongta stated that with India entering a period of demographic dividend, the country is poised for a consumption boom. By 2030, over 200 million households are expected to join the upper middle class and above category, up from just 70 million in 2018. This shift is likely to sustain the demand for housing, making it an attractive investment opportunity.

“The investment required to meet the demand in affordable housing will result in a contribution of around $2 trillion to the GDP,” he added.

According to Roongta, affordable and mid-income housing is rapidly becoming a crucial growth engine for India’s real estate industry. As the sector expands, it is expected to have a significant impact on the country’s economy, with its contribution to GDP projected to surge to 15 per cent by 2030, up from the current 7 per cent. This growth will have a far-reaching impact, driving growth in over 250 allied industries and creating a substantial multiplier effect that will stimulate economic activity and development.