Demand for residential rental properties in seven major cities in India is expected to increase by 10-20 percent by 2022. And in most places it outstrips the supply. This price has increased, according to a report Economic Times (ET) he said.
The increase in demand may be due to people returning from their hometowns as many companies have started calling their employees to the office.
The highest increase in demand for rental properties has been witnessed in Mumbai and Bengaluru. In both cities, the demand has increased by 15-20 percent compared to 2019. In NCR, the demand has increased by 10-15 percent, followed by 10-20 percent in Pune.
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Demand for rental properties in Kolkata and Hyderabad increased by 5-10 percent each and in Chennai by 8-10 percent over 2019. ET Report added.
Magicbrick recently said that Indian rental property searches grew 84.4 percent (YoY) in the second quarter of this year (Q2CY22) and 29.4 percent compared to the first quarter. On the other hand, home listings increased by 28.1 percent.
ET The Reserve Bank of India (RBI)’s tightening of monetary policy has made it more affordable for the public to buy houses, experts said.
In the last three monetary policy announcements, the RBI has increased the benchmark interest rate – the repo rate – by 140 basis points. Along the same lines, banks have increased the loan amount. The country’s largest private lender HDFC increased its rates six times between May 1 and August 9 at 140 basis points; ET Report added.
As a result, the demand to buy the houses may decrease. On the other hand, the demand for rental houses is expected to increase.
The Model Tenancy Bill approved by the Cabinet in 2021 is likely to boost the demand for rental properties further. The Act aims to establish a legal framework in the form of rent tribunals and structured tenancy agreements. This is expected to bring more transparency to the sector, and attract more private investment.
However, most states in India are yet to frame tenancy regulations in line with MTA.