This article in The Hindu Business Line assesses the obstacles to adequate rental supply in the housing market, citing findings from IDFC Institute's India Infrastructure Report. Excerpts:
"Without capital gains, the low rental yields — about 2-4 per cent in most cities, as per a report by the IDFC Institute — are not a great value proposition. Rents must be attractive to entice home buyers to buy or stay invested in real estate. Without either a price correction or a hike in rent, rental yields would continue to be low and there is no reason to hold an asset that gives low returns."
Read the full article here.