City rentals rise 30 pc in a year

With real estate prices spiraling upwards, even rentals across the city have been looking skywards, causing heavy strain on the home seekers.

With real estate prices spiraling upwards, even rentals across the city have been looking skywards, causing heavy strain on the home seekers.

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In the last one-year, rentals have risen in the range of 10-30 per cent in Mumbai, directly affecting nearly one fourth of city's population, that stays in rented houses, mostly in the suburbs.

The reason for this rise is large-scale demand coupled with a huge scarcity of rental homes. Currently, the rent of a one-bedroom hall (1BHK) flat measuring 550 square feet at Powai is being quoted in the range of Rs 20,000 and Rs 25,000 for a month.

A year ago, rent for the same flat was Rs 16,000-20,000 a month.

Similarly, monthly rent for a 1BHK flat at Malad is now Rs 18,000, while the same flat was being rented at Rs 15,000 last year.

In the Bandra-Santacruz belt, rents being collected are in the range of Rs 30,000 and Rs 45,000 for a 1 BHK, which was earlier between Rs 25,000 and Rs 35,000.

Talking to Hindustan Times, Ram Prasad Padhi, CEO, Mumbai Propertys, a leading real estate brokerage firm, said that rents correspond inversely to the limited supply.

“Many buyers deferred their decision to buy due to the rising property prices. But their number is very large while the houses are limited which led to the hike,” said Padhi.

The period of March-June is the peak season for the rental market, as people tend to shift during the summer vacations of their children.

Many of the leases are expiring and the landlords have already started asking for hikes from them putting the tenants in quandary.

“The realty prices have become exorbitant and out of reach for us. However rentals are also increasing and I fear that I may have to shift to distant suburbs,” said Rakesh Wadhwani, who works in a multinational bank and stays in a rented place in Malad.

Housing activists say that all the blame cannot be put on the landlords as the civic body has levied a tax of 40 per cent while the income tax levies a tax of 30 per cent on the total rent collected.

“The owner is forced to charge more in this scenario as a major chunk is taken by the government,” said Ramesh Prabhu, Chairman, Maharashtra Societies Welfare Association (MSWA).

“It also crates a scarcity as many tend to shy away from renting,” he added.