Redevelopment projects trigger up to 15% rise in Mumbai rentals
Publish on : 2022-11-14 12:16:34
The average rental has jumped from approximately Rs 60-90 to Rs 65-100 psf in the western suburbs, and from Rs 45-60 to Rs 50-70 psf in the eastern suburbs.
As several dilapidated old buildings have gone for redevelopment in Mumbai, micro-markets in the city’s western suburbs have seen up to 15 percent increase in rentals.
As per rough estimates, around 3,000 projects are under construction in Mumbai, about 60 percent which are redevelopment projects. "Going by this, it is obvious that rental demand has increased, which has also resulted in monthly rentals increasing by 10-15 percent," said Ajay Chaturvedi, CEO, Real Estate Study Circle, a firm based in Mumbai.
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Ritesh Mehta, Senior Director and Head, West & North, Residential Services & Developer Initiatives, JLL, said: "Rents increase annually by about 5 percent in Mumbai.
However, in the recent past, rentals have increased by up to 15 percent in some areas. This is due to two reasons. One is, post Covid, as people started coming back to the city, rents increased. The other reason is redevelopment. Areas between Juhu-Bandra and Borivali-Kandivali are seeing a lot of redevelopment, due to which rentals have increased by up to 15 percent in these micro-markets."
Ravi Kewalramani, Director, RK Mumbai Realtors, said rentals have increased between 10-20 percent across Mumbai. "In luxury markets like Juhu and Bandra, I had rented out a 2BHK at Rs 77,000 2-3 years back. Now the same property is being listed at Rs 95,000," he added.
Kewalramani said 3BHK and 4BHK luxury apartments are being rented out for Rs 3-5 lakh. Demand is such that hardly any units are left in the market.
"Affordable apartments — like a 1BHK sea-facing flat in Versova — are getting rented out at Rs 50,000. Previously, they used to be priced at Rs 35,000," he added.
Kewalramani rented out a bungalow in the city at Rs 10 lakh. The rent for this was Rs 7 lakh a few months back.
"Every third or fourth building in Bandra, Kandivali is being demolished. The families in those buildings are either renting out properties close by or moving away from the area. This has led to a surge in rentals across pockets," Kewalramani added.
On the outskirts of Mumbai, bungalows and farmhouses mostly comprise the real estate market, say realtors.
"Mumbai is extremely dense, unlike places like Bengaluru where real estate is emerging in pockets. People want to stay close to the heart of the city. Nowadays, we see people renting out their apartments for, say, Rs 1 lakh, and buying a 4BHK apartment in a luxury condominium like Lodha World Towers," Kewalramani explained.
After Covid, people not only want bigger spaces but also other amenities, indoor facilities, and premium features.
The average rental has increased from approximately Rs 60-90 per square feet (psf) to Rs 65-100 in the western suburbs, and from Rs 45-60 to Rs 50-70 psf in the eastern suburbs. Rentals in central Mumbai have spiked roughly from Rs 100-125 to Rs 110 -135 psf, and from Rs 125-160 to 135-185 psf in south Mumbai, according to Ritesh Mehta of JLL.