Mumbai luxury home rents plummet as pandemic makes homeowners nervous
“The security deposit has gone from four-six months to two-three months rent,” said Sandeep Reddy, co-founder of Zapkey.com. “There is a recovery in rents in 2021 compared to 2020 but it remains lower than in 2018 and 2019.”
One of the reasons Reddy cited was a recovery in luxury sales aided by a reduction in stamp duties until March. This made people buy properties.
Ramprasad Padhi, a real estate agent, has helped rent three properties in the Bandra-Kurla complex and the Bandra area with a 25% discount from pre-Covid rents.
âIn the luxury segment, especially for large 3/4 BHK, we are witnessing a stagnation in rentals. Post-Covid vacations have increased and owners have become nervous because they don’t want to keep their apartments vacant any longer, âhe told BloombergQuint.
The monthly maintenance of these apartments is quite high compared to average or affordable apartments and the owners are ready to rent with a discount of up to 25%, said Padhi.
An apartment in regions like Dadar, Mahim, Prabhadevi and Lalbagh which commanded rent of Rs 4 lakh a month before the pandemic now costs Rs 2.5 to 3 lakh, according to Santosh Shinde, a real estate broker.
âThis is because generally large companies rented these apartments for their high-level foreign staff. Now they are working online, âhe said. âMany companies have also cut their budgets and moved their staff to smaller accommodations. “
It’s not just expatriates. Pankaj Kapoor, founder and managing director of real estate consultant Liases Foras, said many local senior executives have started operating from their hometowns. And he set the drop in rents in a range of 20 to 30% compared to the pre-Covid period.
The number of lease registrations, a measure of rental properties, also declined for luxury apartments.
According to Shinde, the Mumbai market has far too many three and four bedroom apartments. âPreviously, if there were 10 tenants out of 100 for such houses, that number dropped to 1,â he said. âNow the owners are forced to negotiate while the tenants have the upper hand. “