India is growing economically but Indians face shortage of housing, says a report released by the World Bank.

“In India alone, estimates of the housing shortage range from 20 million to 70 million yet as much as half of this excess demand can be profitably serviced by the housing and housing finance markets,” says the report released in Washington DC.

The report titled “Expanding Housing Finance to the Underserved South Asia” mentioned many people in the South Asia live in crowded conditions.

According to the report, “One in every 4 people on the planet live in the South Asia region, and more than 14 percent of South Asians have no home, not counting a further 45 percent living in overcrowded conditions.”

The report noted the lack of access to mortgages and shortcomings of the market for home financing in the region.

“Around 30 million middle - and lower - class households in South Asia — which accounts for 11 percent of the region’s population — have the willingness to pay, but unable to have access to mortgages.”

The report examined situation of the five countries in the South Asia Region: Afghanistan, Bangladesh, India, Pakistan, and Sri Lanka.

“Public-sector housing provisions alone cannot cope with the demographic and urbanization pressures of low-income groups,” said the report while mentioning need for the private players in this sector. 

The Washington based Bank also found that housing finance markets in the South Asia have grown at an impressive 30 percent rate in the past decade, but are limited to upper-income groups.

“There is a shortage of more than 38 million housing units in the region, taking into account average household size, this translates to 212.5 million homeless people, 14 percent of a total population of 1.5 billion.” said Ernesto May, the World Bank sector director for poverty reduction and economics management.

The World Bank suggested building affordable housing on low income solutions.

“In some countries such as India, this shift is already afoot. In India, it may be commercially viable to build housing for 23–28 million households (35–45 percent of urban India) whose monthly household incomes are in the range of Rs. 5,000–11,000,” said the report.

“Easing access to housing finance for low-income, rural, and informal population groups is the key that will open the door to the solution,” added Ivan Rossignol, sector manager for private and financial sector development in South Asia.

Last month international consultancy firm Ernst and Young said in its report that India will face shortage of over 26 million houses by 2012.

Read the report