A House to Call Your Own

India has been low-key obsessed with asset ownership, using asset accumulation as a tool to effectively climb higher on the rigid socio-economic-class-ladder. Needless to say that “Apna Ghar — one’s own house” ranks highest on the desirability quotient.

More than 50% people in India live in their own houses, while almost 30% live on rent and 13% in their parents’ house, revealed the latest RICS — Knight Frank report. According to the National Sample Survey (NSS), while there are around 240 million households in the country, the housing stock is short by at least 22 million (based on the last census). It is safe to assume that the demand of houses will keep increasing way faster than the supply over time and so will the prices — making the dream of House ownership even more difficult to realize.

Presently contributing 6–7 percent to the country’s total Gross Domestic Product (GDP), real estate sector in India is expected to reach a market size of $ 1 trillion by 2030 and contribute 13% to the country’s GDP by 2025, according to India Brand Equity Foundation (IBEF) recent report.

Its important to zoom in to understand the housing sector: —

a. There are an estimated 1.8 million homeless people in India, with 52% based in urban areas. A further 73 million families lack access to decent housing (IGH, 2018; Habitat, 2019).

b. The average home loan size in 2016–17, 2017–18 and 2018–19 was Rs 9.03 lakh, Rs 7.83 lakh and Rs 11.83 lakh, respectively. For people living in cities, the average home loan size might appear to be too small. And that’s because of the fact that the bulk of the home loans given by public sector banks and housing finance companies are up to Rs 10 lakh. The trouble is that nothing can be bought in a tier 1 city with the aforesaid amount.

c. Around 3.3% Indians take loans to finance the purchase of their house. The EMI burden reduces their purchasing power for the entire repayment period.

d. It is unknown how many women in India are house owners. Further there is no information on area or value of land legally owned by female members of a household.

Policies/Initiatives to address the skewed supply demand in the sector.

• Pradhan Mantri Awas Yojana (Urban) — Housing for All Scheme: Pradhan Mantri Awas Yojana — Urban (PMAY-U), a flagship Mission of Government of India being implemented by Ministry of Housing and Urban Affairs (MoHUA), was launched on 25th June 2015. The Mission addresses urban housing shortage among the EWS/LIG and MIG categories including the slum dwellers by ensuring a pucca house to all eligible urban households by the year 2022
• Affordable Rental Housing Complexes (ARHCs): Ministry of Housing & Urban Affairs has initiated Affordable Rental Housing Complexes (ARHCs), a sub-scheme under Pradhan Mantri Awas Yojana — Urban (PMAY-U). This will provide ease of living to urban migrants/ poor in Industrial Sector as well as in non-formal urban economy to get access to dignified affordable rental housing close to their workplace.
• Global Housing Technology Challenge: MoHUA has initiated the Global Housing Technology Challenge — India (GHTC-India) which aims to identify and mainstream a basket of innovative construction technologies from across the globe for housing construction sector that are sustainable, eco-friendly and disaster-resilient.
• CLSS Awas Portal: A web based monitoring system, CLSS Awas Portal (CLAP) is a common platform where all stakeholders i.e. MoHUA, Central Nodal Agencies, Primary Lending Institutions, Beneficiaries and Citizens are integrated in real time environment.

It is interesting that this dream of having a roof above your head is still controlled largely by the State. Is this a market failure to have the State intervene in such an investment heavy, volatile market ? Will complete privatization ensure a roof over everyone's head? — a roof to call one’s own, ONLY TIME WILL TELL.