By Manju Yagnik
India’s real estate sector has bounced back to become one of the mainstays of the country’s GDP by contributing almost 13%. And this growth is being consistent across residential, commercial as well as the retail space. After executing a strong vaccination drive along with the boosters, the Indian government has done an excellent job of opening up the markets in a strategic and systematic manner. With the markets opening up and the economy witnessing a V-shaped recovery, India’s real estate sector is also amidst one of its best growth phases ever.
This has also had a significant impact on the rental demand across the country. Recent industry data suggests Indian rental housing searches increased 84.4% year on year and 29.4% sequentially in the second quarter of this year. Furthermore, across 13 Indian cities mapped, total combined rental housing listings increased 3% quarter on quarter and 28.1% year on year. The demand for rental housing has started to rebound after witnessing sluggish activity for nearly two years owing to the outbreak of Covid19 pandemic, mobility restrictions and companies offering the work-from-home option.
Some of the key reasons for this are:
Offices & Schools resume:
While multiple companies are still practicing a hybrid model of WFH and WFO, most corporations, conglomerates and startups have started full-fledged operations by opening up their offices. This means that employees who had gone out of the city would now have to return and find a place on rent in order to resume normal working trends. Youngsters and millennials aged anywhere between 25-40 years are also increasingly looking for rentals because they have mostly returned from their hometowns. Not only offices, but even schools and colleges have completely reopened in the past few months. This has also pushed families along with students to move back to the city, thereby increasing the demand for rental homes close to these educational institutes as well.
Projects with the latest amenities:
Today’s new age projects are designed keeping in mind the modern requirements of the customers. With growing digitization, home seekers have their own list of expectations of tech-based amenities. They are increasingly choosing smart home systems that provide a higher level of comfort while also improving their overall lifestyle. Customers place a high priority on apartments that offer fully furnished or semi-furnished homes and numerous electronic appliances like air conditioners, televisions, etc. These necessary amenities are an effective tool for property owners to draw in new tenants
Implementation of the Model Tenancy Act:
The Model Tenancy Act has brought around some sort of semblance to the rental industry of Mumbai by institutionalizing the entire ecosystem. It not only gives renters three months’ notice before raising rents to guarantee that landowners may collect the market price for their properties but also gives the tenants ample time to make sufficient arrangements in their best interests. It also helps in dispute resolutions, in case the tenant does not vacate the property on time.
Increased connectivity:
Mumbai is in the middle of a massive infrastructure upgrade process right now. With 1 metro line already active and 10 more already under construction, making it very easy for the average Mumbaikar to travel to any part of the city within no time. Apart from that, the city has already established multiple new link roads that have eased travel times equally. To name some – the Jogeshwari-Vikhroli Link Road (JVLR), Santacruz-Chembur Link Road that help connect the eastern and western express highways and lastly the Easter Freeway which has reduced travel time to South Mumbai drastically.
Considering all the above factors, rental housing in Mumbai is expected to boom in the next two years, owing to rapid urbanization, migration to cities, and rising home ownership costs. With offices opening up and employees thronging back to the city, the demand for rental homes would see a constant spike, making this an ideal time for you to become a landlord in the city.
Manju Yagnik, is Vice-Chairperson Nahar Group, Sr. VP NAREDCO, the views expressed in this article solely belong to the author and do not represent the views of SquareFeatIndia
Also Read: Key Factors That Impact Affordability while investing in real estate
