In Mumbai, owning a flat is viewed as a privilege, with a marked contrast between owners and renters mirroring the rich-poor divide.
Take Mr. Shishir Baijal, for instance. The managing director of Kshitij, the realty fund associated with Future Group, enjoys a substantial income but remains a tenant. Residing in a spacious 3,500 square foot flat, he faces an astonishing rent of Rs. 4 lakh monthly.
His landlord, meanwhile, invested in a luxury flat in Juhu via a home loan. Initially daunted by the monthly EMI, which stands at around Rs. 1.5 lakh, he now covers this easily, thanks to rental income nearly doubling that payment, bringing in approximately Rs. 2.5 lakh.
Mr. Chetan Narain, the CEO of Narains Corp and president of the India Institute of Real Estate, finds the dramatic surge in rental rates unsurprising. He stated, "With high rise in capital values, the rental rise was only expected." He elaborated that, in affluent neighborhoods like Napean Sea Road, Bandra, Juhu, Andheri, and Powai, rents have escalated an astonishing 80 to 100% since the end of 2006.
Echoing this sentiment, Mr. Pranay Vakil, the chairman of Knight Frank global real estate consultants, remarked, "Rentals are always 5 to 6 percent of the market value of the property. So, with the steep rise in property prices, it is not surprising that rentals have shot up."