Rental rates to go up af­ter de­mon­eti­sa­tion

Hindustan Times (Chandigarh) - Estates - - ESTATES - HT Es­tates Cor­re­spon­dent ht­es­tates@hin­dus­tan­times.com

The av­er­age price of a house in the main ci­ties across In­dia has in­creased by 3.6% com­pared to last year while rental val­ues have grown at a faster rate of 4.9% dur­ing the same pe­riod. And in the back­drop of de­mon­eti­sa­tion of ` 500 and ` 1000 notes, rental rates are ex­pected to in­crease over the next 12 to 18 months, says a re­port ti­tled Buy vs Rent re­port by fi­nan­cial man­age­ment con­sul­tants ArthaYantra Cor­po­ra­tion.

“At ArthaYantra, we ex­pect to see a cor­rec­tion in real es­tate prices over the next six to 12 months. Cus­tomers would hold on to their buy­ing de­ci­sions dur­ing this pe­riod. As a re­sult, we ex­pect to see up­ward pric­ing pres­sure on rentals as cus­tomers would fo­cus on rent­ing out and wait to make a pur­chase de­ci­sion,” says Nitin Vyakaranam, CEO.

The ear­lier edi­tions of the re­port cov­ered only eight mar­kets that in­cluded Ahmed­abad, Ben­galuru, Chennai, Delhi, Hy­der­abad, Kolkata, Mum­bai and Pune. In the lat­est edi­tion, four new ci­ties have been added. These in­clude In­dore, Kochi, Jaipur and Lucknow.

The four ci­ties in­cluded this year were found to be more af­ford­able for buy­ing or rent­ing a house. How­ever, Hy­der­abad and Ahmed­abad were found to be just as af­ford­able. Mum­bai con­tin­ues to be the most ex­pen­sive city for buy­ing or rent­ing a house fol­lowed by Delhi.

Delhi-NCR is the sec­ond most ex­pen­sive city to buy or rent a prop­erty, says the re­port. The Cap­i­tal has seen cap­i­tal prices de­crease by about 22% over the last four years, while the av­er­age rental val­ues have in­creased by 10.79% dur­ing the same pe­riod.

Mum­bai is the most ex­pen­sive city for both buy­ing and rent­ing res­i­den­tial prop­erty. Though cap­i­tal prices have dropped by 0.42% com­pared to last year, it is still be­yond the reach of a mid­dle in­come house­holds. There­fore, it is the most suit­able city for rent­ing a house.

Ben­galuru leads in rent­ing op­tions, which has pushed rental val­ues down by 2.11% com­pared to last year. Cap­i­tal rates are up by 4.35%.

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