Property rents in India skyrocketed after Covid: Housing.com

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According to a report by real estate advertising platform, Housing.com, rent of residential properties in India has skyrocketed 25-30 per cent after Covid-19 pandemic. According to Ankita Sood, Head of Research at Housing.com, property rent has gone up massively in the last five years due to abrupt rise in property values, resulting in impact on affordability to buy properties and limited supply of ready-to-move in properties. But Sood notes that rent will remain towards the higher end of the spectrum in India for at least next 2-3 years. This is because of a tight supply of ready-to-move-in properties.

According to Sood, rent has grown highest in cities like Gurgaon, Bengaluru, Pune, and Hyderabad.

In Gurgaon and Bengaluru, rent of a 2BHK flat in DLF Phase 3 and Whitefield posh colonies, respectively, is around Rs 50,000 a month. It is relatively lower in Ahmedabad and Pune.

Rent growth outpaced property price appreciation:

Rent growth rate has outpaced property price appreciation rate. The rate at which rent has increased is more than the rate of property appreciation in last five years. This is also because of huge demand for rental accommodations. In fact, a report by Housing.com says so high is the demand for rental properties in the country that after Covid, more people searched for rental properties than for buying purposes on it online search engine portal.

But it’s not that only rental properties are in demand. Property purchase demand has also increased during the same period. Due to this, cost of properties has also gone up by 15- 20 per cent in last five years.

Mr. Dhruv Agarwala, REA Group CEO (which owns Housing.com), said, “Post-pandemic, there has been a sharp revival in housing demand, both for buying and renting purposes. Housing market has seen price appreciation in the last two years after almost a decade of stagnation. The average price rise has been modest at a city level, but there have been sharp rise in some major locations of top cities.”

Real estate sector has seen robust demand after Covid. There has been a remarkable turnaround in the demand and price of residential properties in the country. And it looks trend would continue at least in the near term.

Meanwhile, as interim Budget 2024 is around the corner, Abhishek Raj, Founder & CEO, Jenika Ventures has expressed his wish for real estate sector. He said, “We expect the government to adopt a forward-thinking approach by recognizing the real estate sector as a key investment channel. Considering its potential to act as a catalyst for economic growth, the government understands that comprehensive rules are necessary to increase the desirability of this investment option. They are aware that a well-regulated real estate market safeguards investments and serves as a stimulant by motivating individuals to participate in this important sector. Additionally, the budgetary goal continues to offer specific support for both home buyers and investors. The government works to foster an environment that supports the expansion of the real estate sector by offering appropriate tax benefits. The budget also aims to reduce interest rates to boost economic activity. The dedication to affordability is shown by lowering interest rates, which enables financing for both individuals and enterprises. This proactive aligns seamlessly with the government’s broader objective of supporting an established real estate industry, where prudent investments, legal protections, and financial incentives all work together to create a resilient and dynamic economy.

This move is to encourage investment interest by giving investors and entrepreneurs equal access to reasonably priced funding. Such financial assistance has the power to awaken the startup ecosystem and promote innovation.”