Rental housing sector needs government intervention: Report

New Delhi: The rental housing segment needs government’s intervention as there are many people who cannot afford buying a home, a MagicBricks report said here on Wednesday.

The report also observed that affordable rental homes are required in cities for professionals and students.

“A large population in India can’t afford buying a home and rental housing can be an alternative to such people. This is one area where the government’s intervention is required,” said the “Residential Real Estate” report, adding that in Indian cities, the rentals are very high and many people cannot afford a house with even basic amenities.

“It is important to ensure the right of housing to even those who can’t afford to buy. Rental housing is going to be the next big step,” it said.

The Central government is reportedly preparing a National Urban Rental Housing Policy. Union Housing and Urban Affairs Minister Hardeep Singh Puri had said in March that the policy would be released after due consultation between the concerned ministries.

Regarding the scheme of Pradhan Mantri Awas Yojana (Urban), the report said that more than nine lakh houses of up to Rs 50 lakh each were completed in the last three years.

The real estate sector is likely to constitute 13 per cent of India’s Gross Domestic Product (GDP) by 2025, it added.

“The $120 billion real estate sector in 2017 is expected to reach a market size of US$1 trillion by 2030 (Source: India Brand Equity Foundation) and contribute 13% of the country’s GDP by 2025,” it said.

During the January-June period, a total of $4.9 billion (Rs 33,700 crore) was invested across 31 deals, with an average investment of $158 million per deal, it said.

Further, private equity investments in real estate are estimated to grow to $100 billion by 2026 with tier one and tier two cities as prime beneficiaries. During January-March 2018 private equity investments increased 15 per cent to $2.56 billion (Rs 16,530 crore) on a year-on-year basis, said the report.