Rental housing to see a boom: Savills report

Rental housing in the country could possibly see a boom in the next two years backed by the recent reforms announced by the Government to address housing needs especially in urban areas, said a report by Savills India, a leading real estate consultancy firm.

According to the research report titled – ‘Rental housing in India: A study of the upcoming wave’, rapid urbanisation, migration to cities and the rising cost of home ownership are the three key demand drivers for affordable rental housing in India.

As per the 2011 Census, urban households on rent stood at over 21 million, which is around 20 per cent of the total number of houses in urban India. Almost 80 per cent of the rental housing market in the country is concentrated in urban centres.

While India’s urban population share has grown more than threefold in over a century at around 10 per cent in the 1900s to current levels of more than 34 per cent, annual inter-state migration is estimated to be growing around 9-10 million annually. Meanwhile, the cost of house ownership across India has shown a CAGR of around 5 per cent in the past few years, as per the report.

The events and policy initiatives over the last few years – including the establishment of RERA, PMAY, Model Tenancy Law, and others – gave the foundation for the development of rental housing, the report said.  However, the Affordable Rental Housing Complexes (ARHCs), Operational Guidelines July 2020 released by the Ministry of Housing and Urban Affairs, has now laid a roadmap.

ARHCs, said the report, can be called the most important of all the policy measures since 2005 since it can enhance liveability in the quickest time – compared to other measures which require longer implementation-timeframes.

Anurag Mathur, Chief Executive Officer, Savills India, said, “Rental housing is another market that is yet to be tapped, especially in the urban areas which have seen prices of homes go beyond the cusp of most of the city dwellers. The recently released operational guidelines on Affordable Rental Housing Complexes (ARHC) are a long-awaited giant leap in the right direction.”