Mumbai and its suburbs are witnessing a rapid surge in redevelopment projects, leading to a 30% rise in rental prices over the past year. This increase is the highest recorded in a single year, according to a survey conducted by a real estate research firm.
Many buildings in Mumbai are over 50-60 years old, while several suburban structures have also crossed the 30-year mark. As a result, residents are eagerly awaiting redevelopment projects in their respective areas.
Demand for Rentals in the Same Locality
When a building undergoes redevelopment, residents are provided with monthly rental compensation by the developer until the new construction is completed. During this period, most residents prefer renting homes in the same locality due to the proximity to their children’s schools and daily commute requirements.
With multiple redevelopment projects taking place simultaneously in Mumbai’s western suburbs, a large number of residents are looking for rental accommodations in the same vicinity. However, due to high demand and limited supply, rental prices have surged. Currently, developers offer rental compensation ranging from Rs 50,000 to Rs 1.25 lakh, depending on the locality.
Annual Rental Hike of 8-10%
- Most of Mumbai’s recently completed infrastructure projects are concentrated in the western suburbs, leading to a pre-existing increase in property prices.
- The rise in property values has also contributed to higher rental rates. Additionally, redevelopment projects generally take at least two to three years to complete.
- To capitalize on the market demand, landlords have introduced a clause stipulating an annual rental increase of 8-10%.
