Citizens' Issues
Rental housing demand shoots up; shortage heats up costs

Delegation meets Maharashtra chief minister. Experts back NGOs’ demand for concrete government initiatives

High real estate prices have led many home buyers to opt for rental accommodation over the past few months, perhaps in the hope that house prices would cool off. Now, it seems, that this is causing a rental housing shortage which is also heating up rental costs.

On Tuesday, a delegation of non-governmental organisations met Maharashtra chief minister Prithviraj Chavan and urged him to take steps to create housing stock on land occupied by the railways and the bus transport undertaking in Mumbai, with a special emphasis on rental housing.

Some experts concur with the view and have supported the petition, saying that the shortage of rental housing is climbing to a worrying stage.

"It is typical to focus only on the mega cities which have a lot of economic activity and therefore a large quantum of inbound workforce to drive rental demand. If we factor in the 30-plus cities in India, with populations of more than a million, that also generate considerable demand for rental accommodation, the problem increases in size," says Ashutosh Limaye, director-strategic consulting, Jones Lang LaSalle India.

The biggest segment in demand is the mid-end sector which caters to the average salaried class. The problem is that participation by the organised realty sector is low and only a handful of projects are taken up by the unorganised sector. And as the sector consolidates, there is a high chance that the shortage of rental accommodation will get more acute.

Data from the government stamp duty department shows a 35% rise in the number of lease agreements in Mumbai in 2010.

The delegation that met the chief minister has asked for the land locked away under the now repealed Urban Land Ceiling Regulation Act to be made available for rental housing. Incidentally, MMRDA declared in 2009 that it would start a rental housing scheme, but this has not materialised yet. However, a couple of weeks back, news came of environmental clearance granted for 25,000 rental housing units in the Thane and Raigad areas. These houses will be aimed mostly at the low-end segment.

"The MMRDA model is a good example of how government agencies can boost the rental housing sector. It is a workable and unique model than can be tried in all congested cities across the country," said Mr Limaye. "However, the government alone cannot service the whole bulk of demand for rental housing single-handedly. This means that the private sector has to become more involved."

An area that also deserves attention is the imbalance in the availability of rental accommodation for those who are single and for those with families, which exists in most cities.

Sanjay Chaudhary, business head of Indiabulls Housing Finance points out, "Mumbai is facing a huge-demand supply gap in the housing sector, with less than 50% of the demand being met." High prices have kept customers away from buying houses. But the shortage of rental accommodation that is building up will add to their worries.

Navi Mumbai, Worli and Andheri are said to be areas that offer rental accommodations at reasonable rates. It is estimated that rental value has gone up by 11% in the last one year. According to estimates on, an internet realty portal, in the Palm Beach area, in Navi Mumbai, rental rates have shot up by as much as 47% in the last one year.



C M Kumar

5 years ago

Few months back, Govt of Singapore
has banned second home purchase inorder to avoid "hoarding" of homes by investors. Indians should take note of this extremely smart action by a matured Govt.

Homes in Indian metros should be designated at par with "essential commodity" and discourage having more than one home per person.

Need to take lesson from Singapore in this regard before it is too late to act

rohit n

5 years ago

Its really sad that government is not doing anything to control the rent in aforesaid areas as the rentals have shot up more than 50%, neither it doing anything to controll the people flow to this areas, which creates the space crisis. Its shocking to see brokers are asking for rs.6000./ month for a just a tiny room or 1RK whereas it used to be for merely around rs.3000-3500/month 1 year before

Diesel, LPG prices likely to go up from next month

“Public sector oil companies are losing close to Rs500 crore per day on selling diesel, domestic LPG and kerosene at government controlled rates. We cannot continue with this for long,” an oil ministry official said

New Delhi: After petrol, price of diesel, LPG and kerosene are likely to be hiked next month when a ministerial panel headed by finance minister Pranab Mukherjee meets to decide on passing rise in crude rates to consumers, reports PTI.

“The Empowered Group of Ministers (EGoM) has been scheduled to meet on 9th June,” a top oil ministry official said here today.

“Price of diesel, LPG and kerosene will have to go up (to cover for rise in input crude oil cost). What EGoM has to decide is by how much,” the official said.

State-owned oil firms had earlier this month hiked petrol price by a steep Rs5 per litre and oil ministry may push for a Rs4 per litre increase in diesel and at least Rs20-Rs25 per 14.2-kg cylinder hike in domestic cooking gas (LPG) rates.

Kerosene price hike too is on the cards.

“There is no escaping this time... Nothing can be treated as sacred,” the official said stressing that rates of all three commodities will be hiked.

The EGoM was originally scheduled to meet on 11th May, a day after polling in West Bengal ended but the panel meeting was postponed and has now been scheduled for 9th June.

“Public sector oil companies are losing close to Rs500 crore per day on selling diesel, domestic LPG and kerosene at government controlled rates. We cannot continue with this for long,” the official said.

Oil companies are losing Rs16.49 on sale of every litre of diesel at current price of Rs37.75 per litre in Delhi.

Besides, state oil firms lose Rs29.69 a litre on kerosene and Rs329.73 per 14.2-kg domestic LPG cylinder.


Coal India FY10-11 net profit rises 13% at Rs10,867 crore

Coal India chairman NC Jha attributed the performance to higher sales and better realisations

New Delhi: Coal India (CIL) on Wednesday reported 12.93% rise in its consolidated net profit at Rs10,867 crore for the financial year ended 2010-11 compared to Rs9,622 crore in 2009-10, the company said in a filing to the Bombay Stock Exchange (BSE).

The net sales of the company also increased to Rs50,233 crore for the year ended 31 March 2011 over Rs44,615 crore in 2009-10, reports PTI.

The maharatna firm produced 431.32 million tonnes of coal in 2010-11 which was almost same as the output of 431.26 million tonnes registered in the previous fiscal.

“In a notification on 13 January 2010 the ministry of environment and forests (MoEF) had imposed a temporary moratorium till 31 August 2010 on development projects in 43 clusters labelled critically polluted.... The moratorium has adversely impacted the coal production of the company during the financial year 2010-11,” it said.

CIL’s coal offtake in 2010-11 went up marginally by 2% to 424.5 million tonnes in 2010-11 over 415.8 million tonnes in the previous financial year.

The PSU had reported a 24.2% rise in standalone net profit at Rs4,696 crore for 2010-11 on account of increase in sales and dividend from subsidiary companies.

“The overall result of the company has been very good. It could be attributed to various reasons like our stocks were sold very well. Moreover, there had been increase in sales,” Coal India chairman NC Jha had said while announcing its standalone results.


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