After the demonetisation drive and the rollout of reforms like the Real Estate (Regulation and Development) Act (RERA) and the Goods and Services Tax (GST), the real estate sector witnessed a significant slowdown. With greater attention towards factors like transparency in property transactions and price corrections, investment in residential properties grew at a slower pace. However, this did not mean that people were not searching for places to stay. Instead of buying homes, people opted for rental accommodations, especially in cities with high economic activity, like Delhi-NCR.
Increase in demand for rental homes, post demonetisation
Perceptions, towards rental properties witnessed a big change, during the wait-and-watch period, post-demonetisation.
“Online rental companies like ours, have seen a good spike in the number of queries in the last two years, due to the rising inflation and economic stagnation, which has led to greater interest in renting, rather than owning,” says Puspakant Kaunar, VP – corporate development, NestAway Technologies. “The number of people opting for rental accommodation saw a 50 per cent increase, in terms of the number of bookings, over the last two years,” he says. This trend was especially high among the growing migrant population.
“There is a positive change in the mindset of the migrant population towards renting a house. Demand for rental accommodation is expected to rise, as there is a huge unfulfilled need in the market. India has an average migrant population of around 10.4 million every year. Add to this, market factors like inflation and recession and there is not enough affordability in the market. These factors have partly changed the mindsets,” Kaunar explains.
The proliferation of online rental companies, has also helped change the perception towards renting a house. Kaunar believes that online platforms should strive towards creating spaces that helps tenants to feel a sense of belonging, in a new city. The concept of shared accommodations, is also witnessing a steep rise and penetration in India, with the growing use of digital platforms. New-age companies are driving this perception change, by solving simple problems for people like finding a home and the ability to rent the things that they need.
Regions in Delhi-NCR that are witnessing healthy rental demand
In the Delhi-NCR, regions from Gurugram up to Noida and Greater Noida, account for a major portion of the economic activity. Hence, some of the areas here, drive the rental accommodation activity, as well. According to Kaunar, places near IT hubs are bound to perform better. “For example, areas near Cyber Hub have high occupancy rates. Other areas that are doing well are DLF Phase-2, Sectors 21, 22, 23, 24 and 25 in Gurugram, Sushant Lok, Sohna Road, Sector 62 Noida and in Delhi, Mayur Vihar, Sarita Vihar, Malviya Nagar, Saket and Hauz Khas,” he says.
Sudipto Chatterjee, director of MediaCom, maintains that people are now more willing to stay on rent, as it is convenient and affordable. “There are many employees in our office, who are based in Delhi on a temporary basis. These people look for convenience and affordability, while seeking relief from long traffic jams as their top priority. Even senior management professionals look for rental accommodation, to add to the day-to-day convenience of reaching office or getting their children admitted to the top schools of Delhi. They look for options that make life easier for them, rather than being prejudiced about staying on rent or not owning a property even when they earn handsomely,” adds Chatterjee.