Baker71

In a study done for 83 cities in India for the year 1981 reveals that demographic variables are not important in explaining the choice of tenure. The economic variables probably are much more important to analyze and implement certain policies. The Builders in Kochi have been much influenced by the real estate developments in the national capital city.

Consider the recent study done in Delhi. For the 1960-61 to 1970-71 period the calculations are based on data obtained from Housing Delhi’s Millions, National Buildings Organization, 1978, New Delhi and for the period 1970-71 to 1980-81 data collected from the Bureau of Economics and Statistics, of the Delhi Administration.

The rates of growth of the state income and the per capita income over the period 1960-66 to 1980-81 did not show any marker increase. The rates at which consumer prices and cost of residential building increased in the city is rather insignificant when compared to the present developments. As can be seen from the data, the per capita income at constant prices grew at a minute rate of 0.72 percent and 1.87 percent for the period 1961-71 and 1971-81 respectively. The investment in residential building for the corresponding periods increased at a compound rate of growth of 5.80 and 9.42 percent per annum respectively. An average household in Delhi would have found owning a house much less affordable over time unless the expenditure pattern moved drastically in favor of housing.

In addition, the skewed distribution of income would imply that the number of households who can afford to own a house would be very low. In Delhi, a considerable proportion of households earned an income that was below the national average. Thus, according to a survey made by Bureau of Economics and Statistics, 76.31 percent of the households in Delhi had an income less than Rs.600 in 1971-72. The per capita monthly income of Delhi, reported by the Central Statistical Organization (CSO) in that year was Rs.108.6 approximating to a household income of Rs.5.43 (assuming an average household size of five persons). The situation was not very different in 1980-81. In fact, 66 percent of Delhi’s households had an income less than Rs.1000. The approximate household income per month in 1981 was only Rs.1290.