Bridging the gap between Supply and Demand for Affordable Property in India
In India’s rapidly developing cities, affordable property is in short supply. The demand for affordable property in India is growing as the nation’s 1200 million people are on the move. The result is that 28% of urban households in India are classified as substandard, a percentage rivalled by only that of China worldwide. The supply side of India’s housing market is currently skewed toward middle income to upper middle income groups, leaving low income individuals and families particularly vulnerable.
Potential solutions can be found by looking to others countries. For example, Indonesia pursues a National Housing Policy that provides subsidies to private firms to build a set number of affordable properties for every luxury home they build. By comparison, Shanghai has adopted four approaches to affordable housing for different types of residents — low rent housing, a public rental housing system, houses on shared ownership, and houses for people relocated from old dilapidated buildings. Yet, in India, no such system has been implemented and Mumbai remains one of the world’s most expensive real estate markets.
Despite this, private suppliers are entering the sector to provide market-driven solutions to the shortage. For example, Chototel, a real estate startup, is using technology to lower construction costs and provide affordable property in India from $2 a day. As India’s population continues to grow and more people move to its cities, affordable property is going to become an even greater issue. Both the public and private sector must work together to ensure the pressures rapid urbanization do not impact the most vulnerable.
