Despite slow market, home rentals hit high
House price appreciation, has brought cheers to homeowners in major metros, in the last 5 years and rent for such properties has kept up with the trend. In light to this regard, as per developers and proponents of the real estate market, rental yields have actually shot up by 15-20% in the last few quarters. An expansion in the working population, coupled with higher mobility of the professionals has fuelled a higher demand for rented homes.
Although buyers are moving ahead in the market with the ‘wait and watch’ mood, the home rental segment is heading for north. Given the market reports, the rental segment has borne witness to a sudden surge in values, irrespective of the slowdown that has hit the property sector. As per experts rents climbed up, since prices increased on an irrational base in numerous major markets.
Rents push up, despite low sales
Regardless of the low sales volume, the capital values for housing units in the country did not witness a die down phase, thereby pushing the rentals to go uphill on account of high demand. Furthermore, as per brokers based in Bangalore and NCR, the slowdown did not have much influence on the rental market, and it paved its way towards north.
Locations, where rentals have hit high previously failed to register much rise, however the mid-end rental market is thriving exponentially. In defiance of the declining sales, property brokers, most of whom are small-scaled developers, are engaged in the business of redeveloping houses that are 26-30 years old, changing the facilities and design, along with some amenities.
RENTS — Demand based
Regardless of the old perception, rents do not move always when property rates do. House prices and rents are two different aspects which march on different tunes. One of the biggest aspects which helps to draw conclusion on rent in a locality is the demand for rented apartments and homes relative to its availability. Hence, it turns out to be crucial to determine the proportion of owner-occupied abodes.
Rental yields in the country are comparatively much lower than anywhere else in the world, since only a handful of people look for houses for rent. As per statistics, 66% homes in urban sprawls and 90% homes in rural locations are owner occupied. In addition to it, the proportion of floating population in a country, in search of employment options also influences the rental market. Bangalore, with around 57% of its abodes are up for rent, sets a good example of an urban sprawl with higher returns.
