The senior living market is expected to grow significantly, from its current size of $2-3 billion to $12 billion by 2030, driven by demographic shifts, according to a recent Colliers report.
Notably, the senior population is projected to grow at a much faster rate of 3.8 per cent compared to the overall population growth rate of 2 per cent.
However, the demand for senior living facilities in India remains largely untapped, with a rising formal need for over 3.2 lakh units against a planned supply of only 20,000 units, according to the Association of Senior Living India (ASLI).
“Though the demand-supply gap will remain high even in 2030, the penetration in the senior living market has the potential to witness accelerated growth in the next few years and embark upon an eventual transition into maturity with changing demographics,” said Vimal Nadar, Senior Director and Head of Research at Colliers India.
Tamil Nadu, according to a Statista report, has the second-highest number of senior citizens, comprising 13.7 per cent of the total senior citizen population, following Kerala, and is likely to become a preferred location for real estate companies to establish their presence in senior living.
Bridging the gap in Tamil Nadu
“We are definitely looking to develop more units across Tamil Nadu, in particular, to bridge this gap,” P Suresh, Managing Director, Arun Excello, told businessline.
Currently, Arun Excello Ziva, the company’s senior living subsidiary, operates one unit located in Mahabalipuram, Chennai.
However, “we are not looking to expand anywhere else,” he added, indicating that the company’s focus will continue to remain in Tamil Nadu.
Suresh highlighted the company’s focus on Tamil Nadu and its potential in the senior living sector, noting that, contrary to popular belief, tier II cities are very receptive to this concept. “In fact, Coimbatore was the first city in the country to have an established senior living unit about 13 years ago,” he said.
According to ASLI, currently, about 60 per cent of the senior living demand emancipates from tier II cities.
“My belief is that when a country or State gets richer, the families become nuclear,” said Ankur Gupta, Managing Director, Ashiana Housing Limited, speaking to businessline.
Tamil Nadu, being a rich and educated State, is increasingly shifting towards nuclear families, driving the demand for senior living, Gupta said.
Gupta added that Tamil Nadu’s growing demand is also driven by the large number of residents settling overseas. “With many citizens moving abroad, their families often turn to senior living spaces,” he said.
Ashiana Housing operates two senior living units in Chennai — Maraimalai Nagar and Chengalpattu.
The report further highlighted that with the rise in the aging population, there is a growing focus on health and wellness. Seniors today are more active and engaged than previous generations, seeking senior living options that provide amenities like recreational activities, cultural events, fitness centres, and a lifestyle that supports both vibrancy and peace.
However, in India, the mid-income group is often the most impacted when it comes to housing. The same issue extends to senior living, where this segment has limited options. Most new projects are geared towards the financially well-off, leaving affordable options scarce, according to another report.
Dearth of options for mid-income groups
“Affordable, mid-income and luxury are three different segments, in my belief,” said Gupta.
Gupta explained that affordable housing is priced under ₹25 lakh per unit, mid-income housing ranges from ₹40 lakh to a crore, and the luxury segment starts at over ₹1.2 crore.
Gupta said, “There is definitely a shortage of quality and varied senior living options, and we are working to explore and expand in that area.”
“If you look at our portfolio, 85 per cent of our products fall under ₹40 to ₹45 lakh, which in my opinion, caters to the mid-income segment. However, the reason why affordable does not work is because of service, which is quite difficult to pull off in the segment.”
As per industry data, there are less than 15,000 homes in the mid-income price segment, against a demand for over 2.5 lakh homes.
Suresh of Arun Excello noted that when it comes to senior living, the conversation often revolves around budget constraints, adding that it is definitely difficult to cater to this segment while also offering all the services and amenities.
However, he said, “Arun Excello has been a pioneer in affordable housing, establishing around 1,500 affordable units per year for the mid-income segment. Currently, there are no operators in this category, and we are definitely focused on addressing this gap and providing solutions for this segment.”
“Given the exorbitant land rates in Chennai, tier II cities present an ideal opportunity to cater to this segment,” he added.
To boost the development of senior living facilities, tax-based incentives, relaxation of development charges, increased ground coverage, and inclusive land use permits are essential, according to the report.
States like Maharashtra have introduced model guidelines through MahaRERA to ensure projects meet the needs of senior citizens. Government schemes such as the Atal Vayo Abhyuday Yojana (AVYAY) provide financial support for the operation and maintenance of Senior Citizen Homes.
Policy initiatives and regulatory support
Suresh suggested that the Central government consider reducing GST on senior living homes and provide exemptions, while state governments could lower stamp duty and registration fees, as many seniors are relying solely on their savings.
He also urged the RBI to rethink its policy on home loans for those over 60, advocating for loans based on other income sources like retirement benefits or personal savings.
Ankur Gupta of Ashiana Housing said that while government support in the form of cheaper land could be beneficial, it may also come with certain conditions or restrictions. These restrictions could potentially impact the quality of the senior living projects, leading to dissatisfaction among consumers.