At this time when Indian realty market is surging from strength to strength and investing in immovable property is considered the most sought-after investment option, the rental market in India too has been growing with soaring economy and ever-increasing population.

With the investment boom in India, and the expansion of the IT, ITES and BPO sector, more and more people mainly in the service industry with high-disposable incomes keep on moving from place to place and apparently renting a house is the only option for them.

They consider it more practical to rent a flat or an apartment in the proximity of their workplace. Similar is the story with nearly all the people employed in India’s massive services sector industry.

The Scenario

Nevertheless, it is the burgeoning economy of the country that has been empowering people to improve on their lifestyle. Decent business and salary incomes are leading to higher purchasing power and the impact is visible on the real estate markets.

People are willing to hire properties for setting up or expanding businesses or for moving to the higher-quality housing, at given rates.
Well, there are several other factors due to which people prefer to take property on rent.

One of the other reasons why people prefer renting a house in India is to avoid the hassles of maintaining a house. Renting a house is also considered to be a flexible option; where a tenant can move in and out of a house at his or her preference if the house or locality does not suit his expectations.

Besides, the capital prices of property have also grown up considerably owing to which a large section of people opt for house on rent.

Rentals in India

Segment of residential rentals is primarily driven by the movement of professionals from one place to another. Settling into a job also means scouring the market for residential rentals.

If we take another perspective, Indian population is rising and with expansion of economic opportunities, the income levels of the populace are also rising, considerably.

With this, the demand for house on rent is bound to go northwards. Meanwhile, the trends are in line with expectations and healthy demand is witnessed in the respective segments of flat, apartment, independent house, duplex, condominium, bungalow and villa at major cities of India like Mumbai, Delhi and NCR, and Bangalore.

Of late, the Tier 2 cities like Pune, Hyderabad, Chennai and Kolkata and Tier 3 cities of Chandigarh, Lucknow, Mysore, Indore, Jaipur, Coimbatore, Nagpur etc are also catching up with the trends with an evidential spurt in demand.

Notably, more than 70 per cent of the total real estate market in India is governed by the residential sector.

As for the rental values, an appreciation of 10-15 per cent is witnessed in the average residential rentals in prime residential locations of Tier 1 and tier 2 cities.

Summary

In the present scenario, the demand outstrips supply in most of the preferable residential areas of prime cities of India and the vacancy rates are at ‘not so high’ levels. Taking a suitable property on rent in India thus needs professional approach and market knowledge.