Demand for rental residential houses rose by 10-20% in 2022: Report
The demand for residential rental houses in top seven cities in India has increased by 10-20 per cent in 2022 as compared to the pre-pandemic period in 2019. According to a report by the ANAROCK Group, the demand for rental houses has spiked, and in most places, it has outstripped the supply. This has pushed the prices up, a report by The Economic Times (ET) stated.
The rise in demand can be attributed to people returning from their hometowns, as several companies have started calling their employees to the office.
The highest rise in the demand for rental houses was seen in Mumbai and Bengaluru. In both the cities, the demand rose by 15-20 per cent as compared to 2019. In NCR, the demand rose by 10-15 per cent, followed by 10-20 per cent in Pune.
In Kolkata and Hyderabad, demand for rental houses rose by 5-10 per cent each and in Chennai, it was 8-10 per cent higher than in 2019, the ET report added.
Magicbricks recently said that Indian rental housing searches grew 84.4 per cent (YoY) in the second quarter of this year (Q2CY22) and 29.4 per cent as compared to the first quarter. The house listings, on the other hand, increased by 28.1 per cent Y-o-Y.
ET also quoted an expert as saying that the Reserve Bank of India’s (RBI’s) monetary policy tightening has made renting homes more affordable for the public, as compared to buying them.
In the last three monetary policy announcements, the RBI has increased the benchmark interest rate — the repo rate — by 140 basis points. On the same lines, banks have increased their lending rates. HDFC, the country’s largest private lender, has raised its rates six times between May 1 and August 9 by 140 basis points cumulatively, the ET report added.
With this, the demand for buying the houses may fall. On the other hand, the demand for rental houses is expected to rise.
The Model Tenancy Act, which was approved by the cabinet in 2021, may further boost the demand for rental houses. The Act aims to establish a legal framework in the form of rental courts 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 rules in line with MTA.