Mumbai real estate: Rental registrations up 13% in H1 2024, according to Maharashtra IGR data

By Bricksnwall | 2024-07-22

Mumbai real estate update: In 2022, 3.06 lakh rental agreements were registered in Mumbai, with up to 3.33 lakh lease documents inked by 2023.

In the first six months of 2024, 1.90 lakh rental agreements, also known as leave and licence agreements, were filed in Mumbai's real estate market, representing a 13% rise over 1.67 lakh rent agreements registered in the same period in 2023. According to data provided by the Maharashtra Inspector General of Registration (IGR), these were registered in all segments, including residential, commercial, and retail.

Overall in 2022, 3.06 lakh rental agreements were registered in Mumbai, which increased to 3.33 lakh in 2023. In 2024, around 2.09 lakh rental agreements were registered between January 1 and July 18.

According to real estate consultants, rental agreement registration data show that more properties are being redeveloped. Furthermore, this growth can be due to increased commercial and retail leasing.

Is the rehabilitation of ancient structures in South Mumbai causing a rise in rental demand?

Commercial leasing in South Mumbai increased in 2023 and 2024, but there was also a considerable increase in residential leasing.

"The reason is that many modest, old buildings in South Mumbai are currently being rebuilt, resulting in increased rental demand in the residential sector. However, due to the completion of numerous developments, rental demand and supply may meet in 2025-26," said Pramod Vyas, President of SMART (South MetroCity Association of Realtors), South Mumbai's main body of real estate advisors.

According to Maharashtra IGR data, rental agreement registration is up 13%, indicating that demand for rental units has increased in the city. However, in the residential segment, the surge can be attributed to the redevelopment of a large number of old buildings in South Mumbai and parts of Central Mumbai, which has resulted in increased demand for rented accommodation in those areas," said Dhiren Doshi, a real estate consultant based in Mumbai's western suburbs.

Between Borivali and Malad, the redevelopment of existing structures has reached a saturation point.

There was a wild rush in 2022 and 2023, resulting in a high demand for renting apartments, although this has since subsided in 2024. In addition, there is a cooling off period for rentals. 

"Also, the majority of flats rented out in the last two years in places like as Borivali and Kandivali were leased for three years, and they will enter the market in the middle or end of 2025. This will result in an increase in supply as additional buildings finish construction following rehabilitation. We'll have to wait and see what happens with demand at that time," Doshi added.

According to Zapkey.com analysis, rental growth in Mumbai's elite gated societies has slowed to 5-9% in 2024, down from around 50-60% in the previous two years (2021-23).

In 2021, a 3BHK flat in a top building in Andheri, Mumbai, was available for a monthly rent of 77,000, which increased to 1.14 lakh in 2023 as reconstruction of ancient buildings in Mumbai picked up pace. Consultants report that rents in the city are now about ₹1.18 lakh per month due to increased availability of rebuilt properties, indicating a decrease in the rate of increase.

Source: HindustanTime