Economy

Mumbai has highest vacant housing inventory

Our Bureau Mumbai | Updated on January 29, 2018 Published on January 29, 2018

Rental matters The rental market is also an important part of the urban ecosystem, says the Economic Survey   -  BUSINESS LINE

Metros have large number of unoccupied homes despite rising shortage of housing

The Economic Survey has raised concern about the vacant housing inventory, especially in metros such as Mumbai, Delhi and Bengaluru.

The Survey points that despite a housing shortage, there is an inventory overhang. Mumbai tops the list with 0.48 million vacant houses, followed by Delhi at 0.3 million and Bengaluru at 0.3 million.

In terms of share of vacant houses to total residential stock, Gurugram ranks the highest, at 26 per cent.

Despite the shortage of housing in urban India (more than 18 million households in 2012) (MHUPA, 2016), there is also a trend of rising house vacancies, from 6.5 million in 2001 to 11.1 million in 2011.

According to the national census, vacant houses constitute around 12 per cent of the share of the total urban housing stock.

“The phenomenon of high vacancy rates is not fully understood, but unclear property rights, weak contract enforcement and low rental yields may be important factors. The spatial distribution of the new real estate may also be an issue, as the vacancy rates generally increase with distance away from the denser urban core,” the Survey points out.

Holistic approach

The Survey notes that a holistic approach needs to be taken with respect to housing stocks. “The above data suggests that we need to take a more holistic approach that takes into account rentals and vacancy rates. In turn, this needs policymakers to pay more attention to contract enforcement, property rights and spatial distribution of housing supply vs demand,” it adds.

As a proportion of all housing, renting accommodation is more prevalent in urban areas than in rural. According to the 2011 Census, the share of households living in rented houses was only 5 per cent in rural areas, but 31 per cent in urban areas.

The Survey says a State-wise picture also shows that the more urbanised States, such as Gujarat, Maharashtra and Andhra Pradesh, have a higher percentage of rental housing.

Similarly, larger cities have greater shares of rented housing.

“In many countries, including India, home ownership is encouraged as part of socioeconomic policy. While there are good reasons for encouraging home ownership, it must be recognised that the rental market is also an important part of the urban ecosystem. Rent control, unclear property rights and difficulties with contract enforcement have constrained the market in India in recent decades. These problems need to be resolved in order to allow horizontal and vertical mobility as well as to address a related issue — high vacancy rates,” the Survey has observed.

Published on January 29, 2018

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Sincerely,

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.