Affordable Rental Housing Complexes: Modi government's new ARHC policy to boost supply! Check this report

According to a report by Savills, the government's new Affordable Rental Housing Complexes (ARHC) policy will boost the supply of rental accommodation besides opening the prospects of launching residential REIT in the country. The consultant launched a research report titled 'Rental housing in India: A study of the upcoming wave' at an event organised by FICCI.

India has seen two successful launches and listing of the Real Estate Investment Trust (REIT) so far with fundraising of more than Rs 9,000 crore, but both were for rent-yielding commercial assets mainly office parks.

Rental housing is another market that is yet to be tapped, especially in the urban areas which have seen prices of homes go beyond the cusp of most of the city dwellers.

"The recently released operational guidelines on ARHC are a long-awaited giant leap in the right direction," said Anurag Mathur, Chief Executive Officer, Savills India.

The property consultant said that rental housing in India could possibly see a boom in the next two years backed by the recent reforms announced by the government.

Rapid urbanization, migration to cities and the rising cost of home ownership are the three key demand drivers for affordable rental housing in India.

As per the 2011 census, urban households on rent stood at over 21 million, which is around 20 per cent of the total number of houses in urban India. Almost 80 per cent of the rental housing market in the country is concentrated in urban centres, the report said.

While India's urban population share has grown more than threefold in over a century at around 10 per cent in the 1900s to current levels of more than 34 per cent, annual inter-state migration is estimated to be growing at around 9-10 million annually.

Meanwhile, the cost of house ownership across India has shown a CAGR of around 5 per cent in the past few years, as per the report.