Metros Rental Market Shocking Report: Home rental crisis in metros, ₹1.26 lakh crore of tenants stuck with landlords; Situation is worst in Bengaluru-Mumbai

For working people and students living in big and major metros of the country, finding a house on rent is now becoming a burden on the pocket. Not only are monthly rents skyrocketing in cities, but the huge security deposits demanded by landlords are also completely ruining the budget of tenants.

According to a recent and extremely shocking report by proptech unicorn company NoBroker, a huge amount of ₹1.26 lakh crore is stuck with landlords only in the form of security deposits of tenants living in the country’s 6 largest metros – Mumbai Metropolitan Region (MMR), Bengaluru, Delhi-NCR, Chennai, Hyderabad and Pune. This huge amount indicates a major crisis in the housing market of urban India.

Biggest shock to deposits in Bengaluru and Mumbai

According to NoBroker report, the country’s financial capital Mumbai and IT hub Bengaluru are at the forefront in terms of security deposits. To rent a house in these cities, tenants have to pay a large part of their deposit as advance:

Rent, not deposit, is becoming the biggest hurdle in choosing a favorite home.

The situation in Bengaluru city has become so challenging that the people there 75% tenants admitted that due to excessive security deposits being demanded, many times they were not able to rent the house of their choice even if they wanted to. This means that now for middle class families while choosing a house, the monthly rent is no longer as big an issue as the advance amount deposited in lump sum in the beginning has become.

On the other hand, the situation was of some relief for the tenants in the country’s capital Delhi-NCR. Here 58% tenants received the entire deposit back safely after the end of their lease period. However, about 30% of tenants had some amount deducted from their deposits in the name of maintenance or wear and tear, while 12% of tenants faced serious legal and civil disputes with landlords over deposit refunds.

30 to 50 percent of the income is being spent only on rent.

The largest part of the monthly budget of most families living in urban India is now spent only on paying house rent. The figures in the report are extremely worrying:

• 30% share of income: Nearly half (50%) of tenants living in metro cities are paying more than 30% of their total monthly income as rent alone.

• Worse conditions of Mumbai: The level of inflation and rent in Mumbai is the scariest. Here 25% tenants pay more than 50% of their total salary Putting it directly into the landlord’s pocket. At the same time, 15% people are losing 41% to 50% of their income in rent. In simple words, almost 4 out of every 10 tenants in Mumbai are forced to spend more than 40% of their income just on housing.

‘Forced Tenancy’: Rent is cheaper than home loan EMI!

A very interesting trend has emerged in the report that nowadays it has become more impossible than ever to buy one’s own house in big cities. In almost all tier-1 cities if a person Home Loan for a tenure of 30 years If you take a loan, then its monthly EMI is much higher than the current monthly rent of the same house.

Real estate experts believe that due to rapidly rising property prices and expensive home loan interest rates in urban India, “Forced tenancy” The trend is increasing very fast. People are not able to buy their homes even if they want to because of the fear of heavy EMIs and are forced to remain tenants for life.

Small flats and studio apartments are giving the highest returns (Investors Guide)

If you are thinking of investing in real estate, then small flats are proving to be a more profitable deal for homeowners as compared to big flats:

• The beauty of 1BHK and studio apartments: According to NoBroker’s report, 1BHK and compact studio apartments have emerged as the best options for investment because of the attractive returns they provide. Rental Yield Much higher than big flats.

• Bengaluru-Hyderabad No. 1: Highest rental yield in major cities of the country 4.8% in Bengaluru And 4.6% in Hyderabad Has been registered. In contrast, in larger and luxurious flats like 4BHK, the annual rental yield drops to less than 3%.

Urban India’s real estate market is undergoing a major transformation due to rising rents, high security deposit rates and expensive properties. In such a situation, it has become very important for both tenants and investors to do thorough research before entering into any new agreement.