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Do India’s urban areas suffer from Housing scarcity or abundance?

 

Let’s say you’re Googling Real estate market in + “name of the City”.

In the most likely scnerio, you would be able to read that it’s both Good and bad. You may see that the real estate market is going up or down by a set of conflicting results.

In this situation, you may argue that both can’t be simultaneously true.

In almost every city, there is a sizable part of the population living in non-serviceable and unfashionable areas. They are living in congested conditions and houseless.

Based on the research of an neutral agency, GIZ,a German agency, Chennai is having a big yet unfulfilled opportunity in the housing market. Based on lack of availability, most people are living at less than desirable locations. As per the report, only 40% live in their own-houses while 44% live in rented houses and 15% live in other types of accommodation.

Normally, an unsold inventory in the housing market means a big drawback. But there could be an opposite side of the spectrum.

Based on studies, Chennai has a shortage of 75,000 houses. Chennai has a shortage of 75,000 houses. A report of the Technical Group on Urban Housing Shortage measured many households are non-serviceable and unfashionable, living in congested conditions.

However in Chennai, affordability of houses has been the biggest issue. Not just Chennai, it has been the same case with most of the metropolitan cities. The vision of owning a home in the city or in the state has fled the economic weaker sections, as well as low-income groups in the last few years as the flow of credit from public sector banks have failed to reach the lower layers. Ministry of Housing and Urban Poverty Alleviation stated that the credit flow to the urban poor has always remained a challenge despite the flow of credit to the housing sector has increased.

For the public sector banks, Loans below Rs. 2 lakh have gone down from 51% in 2001 to 4.1% in 2014 in relation to overall housing loans as revealed by the statistics from MHUPA. Similarly, the statistics also revealed that the trend of lending house loan up to Rs. 5 lakh has dropped down from 36% in 2006 to 9.75% in 2010 in relative to the number of housing units financed.

Accounting to merely just 4% increase of urban households, flow of public sector housing (sanctioned around one lakh units) during 2001-11. There is a strategy to involve the market or private sector in giving of houses and thus, the public sector housing will not be able to meet the demand of highly increasing urban households.

 

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