Demand for luxury homes on rent zooms as overseas executives return

New Delhi: The demand for high-end, luxury rental residences in the top metros has surged as executives from global corporations and embassy personnel have returned to their jobs full-time as the Covid-19 outbreak has subsided, according to leading property consultants.

Demand for luxury homes, whether penthouses or farmhouses, fell during the pandemic as families of MNC executives and embassy personnel flew back home. Now that most have returned, there has been an increase in luxury property rentals of as much as 60% in some areas.

The micro markets of the western suburbs and central and south Mumbai in the country's commercial capital; Golf Course Road and south Delhi in NCR; JP Nagar in Bengaluru; and Jubilee Hills in Hyderabad have seen an increase in average monthly rentals.

"Diplomats and foreign nationals working for MNCs who went back to their respective countries are... coming back to India," said Samir Saran, managing partner, India Sotheby's International Realty. "In Delhi, landlords are demanding 25-30% more rent for properties in Jorbagh, Vasant Vihar, West End, Anand Niketan and Defence Colony, which are most preferred by diplomats, foreign nationals and CXOs."

According to Savills, Delhi's south-central region reported the highest rise in rental prices in the first half of FY22 at 60% from the year earlier. A large part of the high net worth individual (HNI) segment is now showing a preference for renting rather than acquiring apartments for their own use.

"Pentup rental demand hitting the market has caused a demand-supply mismatch in many areas, resulting in monthly rental hikes," said Anuj Puri, chairman, Anarock Group. "Most prominent luxury housing markets witnessed double-digit growth in rentals." According to the real estate consulting firm, rents went up 14% in Rajajinagar in Bengaluru and 15% in Worli in Mumbai.

"There is a steep rise in demand for rentals from regional expatriate residents, businessmen and CXOs based in Delhi NCR, and even owners of these properties are looking at moving and upgrading from bungalows to high-rise condominiums," said Aakash Ohri, group executive director and chief business officer, DLF.

Since the beginning of 2021, there has been a sustained rise in demand for luxury homes in NCR that has led to a sizable jump in both sales as well as rentals.

In the past two years, the luxury housing market in Gurugram has emerged as a real estate destination with record appreciation. DLF5 Golf Links residences on Golf Course Road command some of the highest rentals in the luxury and super-luxury segments in the country - as high as ₹8 lakh per month for a 7,000 sq ft flat.