Mumbai's Redevelopment Boom Triggers Soaring Rental Prices

Mumbai, India: The Mumbai Metropolitan Region is witnessing a sharp rise in rental prices due to an ongoing wave of redevelopment projects. Tenants in areas like Bandra, Khar, Chembur, and Borivali are struggling to find affordable housing as redevelopment pushes rental rates up by as much as 65%.

Rentals Skyrocket Amidst Redevelopment

Residents like E. Rohan from Malad West are facing difficulties securing temporary accommodation as their buildings go for redevelopment. Developers typically offer rental compensation, but with soaring market rates, tenants are forced to pay extra out-of-pocket. For instance, Rohan's developer increased his compensation from ₹20,000 to ₹22,000, but he still faces an additional ₹5,000 expense due to smaller available flats.

Reasons Behind the Rental Surge

Experts attribute this trend to two major factors: the post-pandemic demand surge and the redevelopment boom. With over 2,000 buildings undergoing redevelopment, displaced families are actively seeking rental accommodations, further tightening the market. The return of salaried employees to Mumbai after pandemic-induced remote work has also escalated demand.

A Landlord’s Market

Property consultants note that landlords in prime locations like Bandra and Khar are capitalizing on the shortage. A studio apartment in Bandra West that rented for ₹25,000–₹30,000 a few years ago now demands ₹50,000. A 1BHK that was ₹50,000 has surged to ₹75,000.

The rise in rental yield further reflects this trend. Data from 99acres.com shows Vidyavihar leading with 9% rental yield, followed by Jogeshwari and Govandi at 7% and Dadar East, Borivali, and Kurla at 6%.

Buy or Rent?

Many tenants, like Sheldon Pinto from Kurla, are opting for homeownership instead of paying exorbitant rents. After facing constant rent hikes, Pinto purchased a 2BHK in Kamothe, Navi Mumbai, where he pays a ₹20,000 EMI—less than his previous rent.

With Mumbai’s redevelopment spree continuing, the rental crisis is expected to persist, making homeownership an increasingly attractive option for long-term stability.