Housing Sector in India: Issues, Opportunites and Challenges

The Indian housing sector has seen smart growth over the last 15 years. This is primarily due to population growth, shifting of population from the rural to urban areas, breakdown of joint families and easier housing finance. In the early period, after Independence, the Government took the role of building houses. However, it soon realized that it was not able to meet the demand. In the seventies, it was decided to involve the private sector in building houses. A number of residential housing developers entered the fray. Over a period of time, some of these developers have grown to large companies. However, most of the houses in India are constructed by small developers and building contractors. The quality of houses in India is not very good and the cost is also high as per international standards. One of the reasons for the growth of the housing sector is the availability of finance. The first housing finance company in India was HDFC. Other housing finance companies soon followed HDFC. In course of time, banking companies also entered housing finance. Hence, it is easy for a prospective customer to finance his house either through a bank or housing finance company. In the rural areas, due to the absence or lack of proper proof of income, acquiring finance for housing is still a difficult task. This has led to a heavy shortage of houses in the rural areas. The urban poor have also not been able to get finance for housing due to irregular income. This has led to the urban poor living in slums. India faces a huge housing shortage of around 20 million numbers. The shortage is mainly among the urban poor and rural areas. There is need to develop low cost houses using easily available building materials and innovative technology to build houses affordable by all.