The demand for senior living units is currently estimated at 5.6 lakh only, but it is likely to hit 1.2 million homes by 2025, a number too large to ignore from a business point of view.
India may be a nation driven by its youth, but the proverbial wheels of change are already in motion, and soon, we would also have a huge elderly population to cater to.
According to a report by the Ministry of Statistics and Programme Implementation, there were nearly 138 million elderly people in India in 2021. Further, 5.6% of India’s population was in the age bracket of 60 years or more in 1961; this proportion has increased to 10.1% in 2021, and is projected to further increase to 13.1% in 2031, official data show.
These numbers continue to grow, increasing the share of older people in India’s overall population. As a matter of fact, the population of senior residents is projected to register a 130% growth between 2020 and 2050 to reach a whopping 320 million from the current 139 million.
This tremendous social transformation is typically viewed with concern. Our country would soon have more people who would require support than the people who are actively involved in nation building.
While senior citizen-centric policies are aplenty, India, despite being a welfare state, has yet to reach the level of competence shown by developed nations in supporting its elderly population.
While there is no denying the liability factor, this change, which could easily be labelled as one of the biggest social changes of the 21st century, also presents a bouquet of opportunities for various sectors, especially the housing market. This is where the private sector comes into picture.
This social change presents a mega business opportunity for sectors engaged in providing various kinds of goods and services to the country’s elderly population aside from giving them a chance to participate in national building.
Senior living: An emerging asset class?
That the housing sector in India needs to apply itself more diligently to cater to this highly potential buyer segment became prominently clear after the coronavirus pandemic. At a nascent stage when the tragedy struck in early 2020, senior living in India has generated more interest since. So much so that many real estate developers in the country have started to cater to this segment, in dire need for private, elderly friendly accommodations.
However, a lot needs to be changed before retirement homes as a concept can become a full-fledged asset class in real estate. Unfortunately, senior living has failed to get the attention it deserves.
While it is safe to say that there has been an uptick in the number of elderly focused projects in India since 2010, only a handful of real estate developers currently cater to this segment. Not many developers would be willing to invest in such projects because of their limited social acceptability. As a result of this, one would find only a handful of builders who plan to launch retirement communities that would take care of every need of people during their sunset years.
Senior living: Demand metrics
The social perception notwithstanding, the demand for senior living units is currently estimated at 5.6 lakh only but it is likely to hit 1.2 million homes by 2025, a number too large to ignore from a business point of view, if nothing else. Considering the fact that by 2050, senior citizens will outnumber the young population across the world for the first time, they should be kept at the forefront of decision making in developers’ board rooms.
Even though the demand for such homes is expected to come primarily from high income groups, developers must also pay attention to making them viable from the end-user to cover more segments. Quality of amenities and facilities would be a key determiner of whether or not a senior living project could be a success. On its part, the government will have to announce dedicated policies to make this asset class a success for all parties concerned.
(By Amit Masaldan, Business Head, Housing.com)
