10-22% decline in rents for Mumbai’s luxury apartments after lockdownUpdated: Jul 12, 2020 00:07 IST
The Covid-19 outbreak has resulted in decline of rents charged for high-end luxury apartments across the city by around 10-22% from what was being quoted before the Covid-19 outbreak.
For instance, the rent for a 5-BHK (bedroom-hall-kitchen) flat at Planet Godrej building in Mahalaxmi has come down to ₹3.60 lakh per month, from ₹4 lakh-₹4.25 lakh charged four months ago. In close proximity is the Raheja Vivarea complex at Mumbai Central, where a 3-BHK flat which used to be available for a monthly rent of ₹3.50 lakh in March is now being offered for ₹3-lakh rent.
Another well-known complex, Parel’s Ashok Towers, is also witnessing a decline in its rental prices. Before the lockdown, a 2-BHK flat in the complex would command a rental price of ₹1.25 lakh, but now flats are available for a monthly rent of ₹1 lakh.
At Lodha Park, Worli, a 3-BHK house which used to be leased for ₹1.50 lakh four months ago, is now being given for ₹1.25 lakh per month. The rent for a 2-BHK apartment at L&T Realty’s signature project Crescent Bay is now ₹75,000 per month. Four months ago, tenants had to shell out ₹85,000 every month as rent for a flat.
The situation is no different in the suburbs either. The monthly rent for a 4-BHK apartment at Oberoi Sky Heights in Andheri is now being quoted at ₹2.75 lakh against the ₹3.50 lakh priced before the Covid-19 outbreak.
Owners have attributed the decline in the rates to job losses, salary cuts, and losses in businesses as well as oversupply of rental apartments. For years, these gated communities commanded high rentals owing to the sheer number of amenities and open spaces in their premises. Most of these apartments were rented by high-level executives working with multinational companies as well as by entrepreneurs. However, the Covid-19 outbreak has resulted in loss of incomes and hence many are resorting to renting on lower rentals.
Mustafa Chhil, one of the partners in Kamna Estates, which specialises in renting luxury apartments, said owners are being “practical” in the wake of the Covid-19 outbreak.
“Luxury apartment owners have realised that there is no point in waiting for higher rents and are ready to lease out at discounted rates. The high-level executives are now facing salary cuts, resulting in the decrease of their disposable incomes. Also, the insecure job market has made the executives reluctant to take apartments on such higher prices,” said Chhil.
Real estate data analytics firm Liases Foras attributes the decline in the rents to the oversupply in the luxury homes market. “After the lockdown, many investors have now put their apartments on rent to generate some income from their properties, as they have realised that they will not be able to sell the flats,” said Pankaj Kapoor, founder and managing director, Liases Foras.