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Top Cities in India: Rents Go Through The Roof
With high-income professionals aspiring for the quality lifestyle, homes that match their refined tastes are hard to come by in cities like Mumbai and New Delhi.
Mumbai and New Delhi have seen rents surge by as much as 30% in the last quarter in up market residential areas. Bangalore registered a 50-60% increase in the last 6 months, but has settled down to 15% since.
What is driving the rental market? It is the sheer shortage of quality accommodation in prime localities which is driving prices up the wall. In the case of Delhi, the situation is unlikely to ease for another 12-15 months, when the supply scene improves slightly. As for South Mumbai, the scene is bleak till the government steps in with rent reforms.
Top-end professionals from IT companies, established MNCs, banks, double-income families and now the growing number of expatriates is vying for just too few quality apartments in these cities.
Rents in Mumbai city follow a curious pattern. Archaic tenancy laws which favour the tenant have resulted in prime property in South Mumbai in the possession of tenants paying rents at 1940 rates. On the other hand, compact 2-bedroom apartments command rents equivalent to rates in New York and Tokyo. The situation can improve once rent laws change, and premium land becomes available for new construction. Strangely enough, properties commanding the highest rents in South Mumbai are characterized by creaky, termite ridden wooden stairs and antiquated lifts!
The northern suburbs in Mumbai are attracting attention, as they have more to offer in terms of quality lifestyle. However, poor connectivity with South Mumbai, which still houses a majority of the commercial establishments, is deterrent. Real estate experts believe commuters would be willing to travel that extra mile had infrastructure been better.
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