Nature of rental housing market in large cities in Kerala

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Nature of rental housing market in large cities in Kerala

Post  rexin90 on Tue Oct 05, 2010 7:06 pm

The demand for rental housing is expressed by primarily three categories of people in cities in Kerala with a large population, viz.,
1.The new migrants or the transient populations;
2.Families which, for various reasons, prefer to stay in rental housing rather than in ownership housing and
3.Groups which cannot afford to acquire a house on any terms.

However, the relative proportions of these people groups vary from city to city in the state. Rental housing has certain inherent advantages from the individual’s point of view. It has low initial investment and greater flexibility for future tenure options. This makes it a more preferred alternative for more mobile younger households, the floating population and the new migrants.

For people intending to own apartments and homes Kerala and its most happening cities are now out of bounds due to the phenomenal appreciation in land values. The high cost of houses in the formal sector now deter a large segment of the population from owning a home, as even the cheapest price house offered by the public housing development agencies is not affordable to the lower income groups. Even in the informal housing market, the constraints of ownership for the poor families leads to renting as the initial option.

As in other countries, a majority of the people in Kerala would like to acquire a house either through outright purchase or by constructing it on their own. This is fortified by the expected appreciation in house values, uncertainty of rental tenure (especially for staff housing)/rigors of rent control like rentals applicable for particular areas etc. However, the high price of housing and inadequate access to credit at reasonable rates drive the poor households in to rental housing. In smaller cities, the lower levels of income and lesser access to credit offset the low cost of housing, thus making ownership housing difficult for poor people.

rexin90

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