The Secret Behind India’s Growing Rental Housing Market

Despite a boom in development in the real estate sector, India’s housing rental market is still growing at an exponential rate. Many factors contribute to this growth - 15–20% climb in property prices post-pandemic, escalating home loan rates, the supply and demand imbalance in buyers and available housing units and more. The rise in rents, especially near central business districts is expected to soar higher.

Delving into the data reveals a compelling narrative of the trends. The IRIS index of Housing.com which tracks online search trends of key real estate markets and a barometer of high-intent search volume, highlights a significant trend—since 2022, the rental index consistently outstripped the buy index, culminating in a remarkable 23-point difference by the end of 2023. This also indicates that this growth is compelling owners to increase monthly rents. Also, it is noted, that localities adjacent to commercial hubs in cities like Gurugram, Bengaluru, and Hyderabad have experienced a staggering 55–60% spike in rents compared to pre-pandemic levels, signalling a profound shift in rental preferences and market dynamics.