Rental accommodation becoming costly due to property tax and Service Tax. Besides this since the capital value is still far not reachable in metros, the rental rates in premium segment is rising. The rates in affordable housing segment still not coming to ages or mature enough as capital market. The capital appreciation though have gone up three times since 2001 but rental value in affordable housing segments still very low. This has discouraged the investors to invest in affordable housing.
At the same time, premium housing and posh localities the rates have gone very high. A normal building in Bandra west with parking is costing almost 120/- per sq ft per month. Where as in Kalina it is still at 35/- per sq ft. to 45/- per sq ft per month inclusive of society charges and property taxes.
In Delhi, central Delhi and South Delhi still costing very high. New Delhi the residential rates are still very high. It has marginally came down because of decentralisation of Delhi by Metro. But premium segment still out of reach of middle income group.
Kolkata and Chennai also shown a positive sign in rental accommodation. The rates are marginally high since 2011. Bhubneshwar and Kochi are cities to watch. The rates have 400% increased in last two years. Ranchi, Gwalior, Kota, Pune, Hyderabad, Indore, Jaipur and Sawaimadhopur cities too have seen exponential increase in residential segment. Average increment in these cities recorded as high as 200 to 255%.
Commercial lease rentals are still waiting their turn and there is no hope to revive the commercial lease rental market in near future.