It was against the odd to many who expected the stagnating home sales would boost the home rental market in the country. The rental market across the country has remained more or less flat over the past one year amidst the inventory pile up. Only a few locations in the metro cities like Delhi, Bengaluru, Mumbai and Gurgaon has shown a marginal hike in rental market. On contrary to this, a survey by real estate portal revealed the home rental market in Kolkata has spiraled up in certain areas. Along with the inventory pile up, stagnant rental market also has become one of the key concerns in realty sector.
Delhi holds close to 2 lakh unsold residential properties to its chest which can be expected to take 14 quarters to be sold off. While Mumbai has approximately 12 quarters of inventory pending, Hyderabad inches close to 8 quarters. When the home sales are piling up, the rental market is right on the cards. But unfortunately it hasn’t flourished as expected.In the ancient days, the lack of infrastructure forced the people to rent their homes at prime locations even if the rentals were high. But the scenario has changed now with wide spread infrastructure and good connectivity factor. Advents like metro, flyovers, expressways and much more has made people to travel to affordable destinations.
Hence the home sales and rental market are in a stagnant stage. But the demand over the realty properties is not losing as day by day construction goes in full swing. It’s the buyer who is reluctant to engage in realty arena, whether it is rental market or home sales. For rental market to thrive in India, primarily we need an ideal legal frame work. Nowadays a large number of people travel from one place to other, especially youngsters in search of better livelihood. This offers good scope to the rental market. But with under performance in the law and lack of reforms to boost the rental sector, it’s the future of India that wanders homeless.
And on the other side the landlords are also facing problems in renting their home. The acts enacted by the government in the rental market allow restrictions to land lords on price increases and leasing their apartments. With rental income capped at outdated prices amid land lords who engage in long term leasing with tenants, they faces severe loses in their rental stock. Once confronting with lose, these properties will not be rejuvenated by the land lords leaving it to dilapidate.
One of the major nightmares to the land lords are the tenants who fails to pay the rent of the leased property. This is a frequent issue faced by the land lords, further dragging them back from the renting their property. This further becomes a drawback to the development of rental market.
Can you imagine how many people over the last year have migrated to metro cities from rural villages in search of jobs? These people are especially youth who represents different social strata and will look for leasing a home till the time when they are settled down. So rental market holds huge future perspectives and has to deliver much stronger countering all the hurdles.
Madhyam is a well known Real Estate Consultants in Noida, Delhi NCR.