As a generation of Indians age, brighter days incoming for senior living industry

An ageing population, and a flurry of socio-economic changes, especially following the Covid-19 pandemic. These are some of the factors that could make senior living industry a boom sector in the years and decades to come, experts say.

The $10-plus billion market is slated to grow at a compound annual growth rate of over 10 per cent between 2022-2027, according to data from research firm Mordor Intelligence.

From increased per capita income, improving life expectancy and declining taboos - the wheels of change are in motion.

The population that joined the workforce immediately after liberalisation will be the ‘new old’ in the coming decades, said Ankur Gupta, who is a joint managing director at Ashiana Housing Limited. This cohort of seniors is far more educated and exposed, with higher disposable incomes devoid of the burden to pass on inheritance to their children, he explained.

“Awareness with the kids is also increasing, they are well read, well-travelled, and understand that they should do what is right for their parents,” added Dr Reema Nadig, co-founder of KITES Senior Care.

The Covid-19 pandemic further brought out the need for quality healthcare and a change in mindset in favour of deploying savings towards a better standard of living said Ishaan Khanna, Chief Executive of Antara Assisted Care Services, adding that the trajectory for higher occupancy rates at Antara picked up in the pandemic years.

The Indian population aged above 60 is expected to double to 20.8 per cent (34.7 crore) in 2050 from 10.5 per cent (14.9 crore) in 2022, as per a report by the United Nations Population Fund. By the end of the century, the elderly will constitute over 36 per cent of India.

“With the elderly population of India growing at an unprecedented rate, we see many new entrants in the senior living industry,” said Ajay Sharma, Managing Director for Valuation Services at property consultancy Colliers, adding that these players are experimenting with various business models.

Opportunities in the space

Catering to housing facilities with medical care solutions for the sunset years of individuals, the senior living industry is largely divided into four sub-categories, in order of a progressive degree of dependence on caregivers - a) independent living, b) assisted living, c) nursing care and d) memory care.

“While the first two are typically seen as realty offerings, the latter duo is seen as healthcare operator-driven services,” highlighted Sharma. Accordingly, nursing and memory care services in India currently enjoy 100 per cent Goods and Services Tax exemption.

As of June 2023, there were as many as 62 senior living projects (developed or ongoing) across the country by the top 12 real estate players, data from property consultancy Anarock revealed. Additionally, there are at least five new projects under construction, including two in Bengaluru, and one each in Chennai, Kolkata and Coimbatore.

“The southern cities have a nearly 70 per cent share of these projects, coinciding with the demographic assumption that elderly population growth in the southern states will grow at a faster pace than the rest of India,” highlighted Prashant Thakur, who is a regional director and heads research at the consultancy.

Others agreed.

“South India is a much more mature market than North is today,” Khanna said. He sees demand for senior living unfold in waves, moving from metropolitan cities to tier II towns.

A distinct play

Senior living facilities are priced 15-20 per cent higher than a conventional residential unit owing to feature customisations suited to the needs of the elderly, noted Sharma. They are mostly horizontal due to issues like vertigo with the old, laced with support railings, anti-skid flooring, well-rounded edges, strong power backup, motion-sensor based lighting and so on. The developer has to factor these in while arriving on the price point, he explained.

Industry players described the mid-premium housing bracket, priced between Rs 40 lakh - Rs 1.2 crore, as the popular category amongst seniors. There is a growing demand for larger sized homes with better specifications, they added.

A typical senior housing customer is usually somebody with a 15-plus lakh per annum income, making a second home purchase, with an appropriate corpus set aside for everyday needs.

Talking about rentals for assisted living facilities, Khanna described Rs 45,000 to Rs 1 lakh as the average industry range for monthly charges, depending on the quantum of assistance and services availed.

Awareness has grown about the concept, and the country is slowly but surely shedding the taboo against outsourcing care of the elderly. This however, continues to be a work in process, industry analysts noted.

Furthermore, a shortage of ready-to-move-in supply of senior living facilities plagues the landscape.