The Growing Concept of Retirement Homes in India
The multi-generation joint family structure is still prevalent amidst the rampant modernization in India. Even though the housing model for the elderly may still carry a social stigma, which is reflected by India accounting for less than 1% of the $25 billion global senior housing sector, retirement communities in the country are now starting to gain traction. Factors like growing incomes, larger life expectancy and the advent of nuclear families with people relocating for jobs – all are pushing the demand for real estate as retirement homes and also drawing a bevy of investors and developers to this segment.
The Scenario
Today, a major section of senior citizens are financially stable, independent, socially connected and well-traveled. Most of them have planned their retirement and have a fairly good idea as to how they wish to spend their time and money. Indian population is younger than China, Japan or the USA. However, by 2025 the count of people above the age of 60 is likely to double to about 173 million.
According to real estate consultancy company Jones Lang LaSalle, the annual requirement for senior homes in 135 Indian cities is 312,000, which far exceeds the supply of 15,000 new homes from the upcoming projects.
The Target Customer
Elderly Indians coming back from overseas are the ultimate customers for this segment of real estate. Most retirement homes are focused towards urban middle and upper class investors who can afford to buy an apartment between Rs. 30 Lac and Rs. 6o Lac. This price bracket is comparatively cheaper compared to the Western standards
Investing in retirement homes in India will reap annual returns of about 25% for the real estate developers, who are keen to keep the rates affordable for mid-segment buyers as they would be paying cash as the banks may not allow mortgages to retired seniors.
Developers intend to charge extra for amenities like food and are in hope that with the growth of the industry economies of scale will bring down the costs.
New Housing Projects as Retirement Homes
There is a rapidly rising number of real estate developers who have joined the bandwagon to build new housing projects as retirement homes. The long list of builders setting up projects for this purpose includes the Athashri retirement project. This Pune-based venture caters to buyers above the age of 55 and offers amenities like a clubhouse, library, swimming pool and gymnasium. There is also a holy temple within the complex dedicated to worshiping Lord Ganesh, who is followed by most Hindus in the state of Maharashtra. The project consists of 180 residential units overlooking picturesque hills and open fields. Adorned by expansive lush gardens, the development aims at offering peace and calm, away from the noise and chaos of the mega cities. At Athashri, there are all kinds of facilities provided for the elderly – anti-skid tiles, corridors with handrails, a 24×7 ambulance and a doctor. All these elements set a retirement home apart from an ordinary residential project. These homes have a rope in the bathrooms along with numerous red emergency buttons for calling the caretaker and for other emergency purposes. It may cost about 30% more to construct such senior homes due to the requirement for additional features but they certainly sell for up to 20% higher as well, in comparison to the regular units.
- The managing group of Athashri, Paranjape Schemes Ltd, is among the small number of enterprises tapping the mushrooming senior living sector. This count also includes Max India Ltd., supported by Goldman Sachs Group Inc., which recently launched its first senior housing project in May 2013 in the Bangalore city and is now planning nearly four more ventures of this sort.
Author bio: Devika Arora is a professional writer dedicated to following the current real estate trends and writing guest posts and blog posts for the benefit of potential home buyers and investors. The above article analyzes the growing demand of housing projects as retirement homes.
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Category: Retirement, Saving Money
