Smart pricing will get buyers
Attractively-priced and well-located mid and upper-mid category residential projects will continue to lure investments in 2015
Although India’s housing segment accounts for almost 80% of the real estate and construction sector in terms of volume, we continue to have a housing shortage of approximately 19 million units. According to the Ministry of Housing & Urban Poverty Alleviation (MoHUPA), government of India, the 10 states of Uttar Pradesh, Maharashtra, West Bengal, Andhra Pradesh, Tamil Nadu, Bihar, Rajasthan, Madhya Pradesh, Karnataka and Gujarat constitute about 76% of this urban housing shortage. Around 56% of this shortage is among households from the economically weaker section (EWS) with an average annual household income of up to ₹ 1 lakh, while approximately 40% is among households in the lower income group (LIG) with an average annual household income of ₹ 1 to ₹ 2 lakh. Nearly 96% of this housing shortage, therefore, lies among the EWS and LIG categories of urban India.
The lack of access to formal credit along with high priced home loans and debt, leave the bottom of the housing market pyramid with little more than squatter colonies, urban slums and unauthorised settlements by way of affordable accommodation options.
To tackle this enormous shortage that is expected to accelerate with rising migrant population movements to urban areas, MoHUPA has been focusing on an affordable housing policy that includes a rental housing interventions programme.
Despite a housing shortage of approximately 19 million units, around 10.2 million completed houses are also lying vacant across urban India, which may be absorbed within a formal rental housing programme to address issues of urban accommodation. Although the larger focus has traditionally been on ownership of housing, the significance of rental housing cannot be emphasised enough.
Vulnerable population groups either residing in or migrating to urban centres, in need of rent- al housing for employment or education, include: Single students Young, single executives Newly married couples Migrant families, and The elderly.
Rental housing offers a convenient and cost-effective option for all such migrant populations that might not want to make long- term financial commitment in a city. While the higher and middle income members of these groups have the option of hiring apartments and bungalows in upmarket and middle class residential areas, the LIG and EWS groups are left with hiring rooms or jhuggi-jhopdis in unauthorised colonies and urban villages.
According to the Census 2011, around 69% of households in urban areas live in owned dwellings, while about 28% live in informal rented accommodation, and just about 3% in formal hired dwelling units. Taking cognizance of this scenario, a task force on rental housing was constituted by MoHUPA, the objectives of which were to: Develop a strategic policy i ntervention to promote rental housing as a viable