Property prices drop down, but home rents are still increasing
In last 12 months, the prices of property have dropped down but still the rents of properties are increasing day by day. Some areas witnessed the increase of up to 20 percent in the rents of property.
Commonfloor.com data
According to the data of Commonfloor.com, the rents of property increased by 10 percent in Delhi and Mumbai, while the southern cities like Bangalore Chennai witnessed a modest increase of 8 percent and 5 percent respectively.
Home rents have seen a continuous increase, while the prices of property dropped by 3 percent in Delhi.
Vacant Houses
Mr. Amitabh Kundu, a professor at Jawaharlal Nehru University, says that many existing homes are unavailable for the paying guest. Almost 11 million homes are vacant, according to the report from the Ministry of Housing and Urban Poverty Alleviation.
A report says that while the real estate market is low as the speculators are staying away, the rental market has no speculation. The land lord quickly increase the price with the increase in the demand and rental home finders will have to pay that rent as they want immediate accommodation.
Mr. Sundar Prakasham says that better infrastructure and the introduction of new companies is responsible to increase in the rents. In areas like Whitefield and North Bangalore rent has increased up to 15-20 percent.
Mr. Prateek Sukla says that the rents in Andheri, Malad and Bandra in Mumbai are increased by 10 percent as these areas are becoming industrial hubs.
Local Factors
Mr. Nakul Seth says that local issues are also responsible for increase in rents. The rent around Gurgaon has gone down by 15 to 20 percent as ready for possession homes are on the rise.
A real estate broker says that in Bangalore, the launches and inventory are low and expected the delay in projects to be responsible for increase in rents.
Source: The Business Line
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