Huge housing shortage in India; but high vacancy rates too
India currently faces a housing shortage of approximately 18 million units. However, despite the huge housing shortage in` the country, the vacancy rates are quite high in some of the leading cities of the country.
Expert analyses of the current situation in India’s housing market have revealed that although housing continues to be a big problem in metropolitan cities like Delhi and Mumbai, the vacancy rates in these two cities is extremely high, as compared to the other two metros – Chennai and Kolkata.
Moreover, the vacancy rate in tier-II cities of the country even higher than those in the metro cities. In tier-II cities, the percentage of house lying vacant is in double digits. The high vacancy rates in tier-II cities reflects that the housing challenge faced by these cities is much bigger that those faced by the metropolitan cities, particularly because tier-II cities have a comparatively much lower level of absorption than the metros.
Some of the key reasons for the high vacancy rates amid housing shortages in India include the fact that the realty market in the country is largely investment-driven, and Non-Resident Indians (NRI) who have invested in the Indian realty sector mostly have their houses kept vacant.
Moreover, in some cases, high vacancy rates also result from unrealistic pricing by developers; and a demand-supply mismatch. In addition, low rentals and poor infrastructure and connectivity also sometimes contribute to high vacancy rates in some areas.
Source – The Indian Express
high vacancy rates, housing shortage, largely investment-driven, Non-Resident Indians, Tier-II cities
