5 Proven Strategies to Boost Real Estate Conversions
For Indians, owning a home is like a dream come true. However, the pattern is shifting as renting a home becomes less expensive than buying one within the city limits or close to commercial districts. In the years following the pandemic, the rental housing sector has grown. The residential market, however, is seizing the majority of the chances and is expected to continue expanding as a result of tightening monetary policy and people getting back to their daily routines. Continue reading this blog to learn why rental housing demand in India is rising.
With rampant urbanization nationwide, a migrant population spilling into cities, and the popularity of ambitious housing missions like the government's "Housing for All," India's need for rental housing is at an all-time high. Although owning a house instead of renting is considered asset building, real estate prices in India are excessively high when compared to the rental value of the same property. For example, in Mumbai or Gurgaon, the price to rent ratio, calculated as Price of Property / Annual Rent of the Property, may be as high as 41, given that the price of a property in these cities top locations is around Rs 2 crore and the annual rent is approximately Rs 4,80,000. (Rs 40,000 per month).
Why is the rental housing demand rising?
A growing number of people are looking to in Indian cities, which have traditionally been thought of as wise investment options by generations. Our cities are rapidly becoming more urbanized, nuclear families are on the rise, there are more job opportunities, and students are relocating to the city and nearby suburbs for higher education, which creates a great potential for the rental housing market. Additionally, the city highways are overcrowded and commuting times are particularly long due to the availability of cheap car loans, readily available cars in showrooms. In order to save time on their commutes and live more comfortably, millennials prefer to live closer to their workplaces. The foreign and diplomatic communities, who settle in the city for a limited time due to work commitments, make up another consistent end user base.
For all migrant populations who might not wish to make a long-term financial commitment in a city, rental housing offers a practical and affordable choice. It is the most accessible solution to the rising housing demand in urbanizing nations like India. Since renting a property gives the migratory population more mobility and freedom, especially in places with high capital values, it becomes a preferable option for tenants across the economic spectrum.
Rental Market in India
The rental market in India has seen significant growth in recent years, driven by factors such as urbanization, a growing middle class, and increasing affordability of housing. The demand for rental properties is high in cities such as Mumbai, Delhi, Bangalore, and Pune, with the majority of demand coming from young professionals and students. However, the rental market in India also faces challenges such as high demand for housing, lack of standardized rental agreements, high security deposits, the absence of a unified rental law, limited supply, and inadequate infrastructure, which can result in higher prices and increased competition for rental properties. Despite these challenges, the rental market in India is expected to grow in the coming years, driven by the increasing demand for housing and the ongoing urbanization trend.