Residential rentals in Mumbai are seeing a downward slide. Blame it on COVID 19, with pay cuts even tenants are looking for cheaper accommodation. Landlords prefer lowering rentals over an empty home.
By Varun Singh
On June 25, a 1549 sq ft flat in a prime building on Bhulabhai Desai Road was leased out for Rs 1.75 lakh.
In the same building, on February 24, a flat measuring 1044 sq ft was rented for Rs 1.65 lakh.
This is one example of how the rentals even in the prime residential localities of Mumbai have started to slide downwards.
There are many such examples, where landlords, are willing to lower the rentals of the residential properties they own.
The trend was already visible in commercial properties. Where landlords were willing to waive 50% rent till September and in some cases till December for existing tenants.
In commercial properties even new tenants are being offered the rent waiver. Landlords prefer earning less is better than keeping their shops empty.
Seems the similar trend is catching up with residential properties, with landlords letting go their properties at lower rents.
Amit Bathija of Expat Housing Mumbai, says, “The rental market is definitely affected, in the lower end of the market of 1 bedroom apartments prices have dropped by 8 to 10%, the rentals for 2 and 3 bhk have gone down by 15 to 20 %, the worst affected is the higher end luxury segment where there is absolutely no demand at the moment.”
According to Bathija, the bulk of the demand for these apartments are generated by Corporates and expatriates.
It is an open secret that most of the corporate individuals have gone through a 10 – 20% pay cut and are under severe financial stress where in they just cannot afford to continue at the current rentals.
Siddhant Gupta, of Brickhouse, a realtor from Western Suburbs said, “The residential rentals have gone down since February and several non payment’s of rental since then as well.”
The situation worsened with many leaving the city for their hometowns. Because of which the number of homes lying empty has increased. Thus making severely affecting the demand supply ratio.
According to Gupta, Mumbai which attracts a lot crowd from different cities because of Bollywood and better job opportunities, has also seen most of these people returning to their home towns.
The rental market is impacted because several buildings are still not allowing visits or shifting of new tenants due to the fear of the pandemic.