The Looming Rental Crisis and the curious case of Property prices in the Indian Metro Cities
Updated: May 13, 2021
Indian property market especially in metro cities like Delhi, Mumbai, Bangalore and Hyderabad has seen massive growth over the past few years. Real estate prices in these metro cities have been skyrocketing even when the property prices in other cities have been decreasing with changing market conditions.
But somehow Delhi and Mumbai markets have been untouched by such market conditions. However, things have appeared to be changing in COVID times. Ever since the lockdown was announced in March 2020, millions of shops, commercial properties, offices, factories, and residences on rent have been vacated by the tenants. Uncertainty over the business and unable to pay such high rents, most tenants decided to vacate the premises and lay cold for a few months until the situation settles.
Vinod Mukherjee, commercial property consultant at Hello Property says, “Majority of commercial property tenants have renegotiated rents with the property owners. There has been a reduction of 20-50% rents in many cases. In places where the owners have refused to renegotiate the rents or have given less reduction, the tenants have vacated the premises.”
While speaking to Sanjeev Kumar, luxury residential property consultant at Hello Property, we got to know that such phenomena has not yet reached the luxury residential property market. He says that there has been a reduction of rent of about 25% in affordable residential properties but not in the luxury residential property market.
The selling price of residential properties in the majority of posh areas of Mumbai and New Delhi hasn’t decreased. The owners are still seeking premium while selling their property.
Rajeev Mahatre, a renowned property consultant in Mumbai says, “We might see a reduction in property prices in next 4-6 months as the property slowdown deepens. But the decrease is not going to be beyond 10-15% in value.”
What is interesting is that with millions of properties now lying vacant – rental prices have been affected but sale prices remain largely unaffected. The curious case of the Indian property market still looms.