As Mumbai suburban rents soar, experts call for key housing policy changes

Rents in Mumbai have risen by more than 30 percent in some suburbs over the past two years

For Nandini Paul, a professional in her 20s, who works in Lower Parel and lives in Andheri West, house-hunting wasn’t the issue; it was managing brokers and the escalating rents.

“The landlord lives elsewhere.  So, the broker, who has power of attorney, increases rent by 10 percent annually,” said Paul, who shares a 3BHK apartment with two roommates.

“We now pay Rs 72,000 per month, up from Rs 60,000 when we first moved in. On top of that, the broker charges a fee of 50 percent of the updated rent each time we renew our lease,” she said.

Triple whammy

This scenario is familiar to many professionals who have experienced steep rent hikes since the pandemic, across Mumbai’s suburbs. A surge in demand, redevelopment projects and the rising influence of brokers, have sent rents skyrocketing, especially in high-demand areas like Andheri, Borivali, and Santacruz.

“I was looking for a 1BHK in the western suburbs with a budget of Rs 25,000 but had a difficult time,” said a Mumbai-based advertising professional. “Most listings I found required a broker, and the terms were unreasonable—like annual broker fees and security deposits as high as Rs 1 lakh. I finally settled for a small 1BHK in an SRA building in Andheri for Rs 24,000 a month,” he said.

Mumbai’s island city has long been unaffordable for many, pushing residents to the suburbs, especially the western stretch. These areas offer superior connectivity through the suburban railway and metro, as well as ample social infrastructure, making them popular choices despite the high cost of living. However, the post-pandemic rental surge has priced out many would-be tenants.

“There was a rapid increase in rental rates of about 22-23 percent last year , while this year, it has slowed to around 11-12 percent. Normally, rental growth is about 5-6 percent annually,” said Saurabh Garg, co-founder and chief business officer at property tech firm NoBroker. “In the last three years, demand has been strong, particularly in suburbs like Andheri and Kandivli, and that has driven up rents,” he said.

Experts attribute this surge to supply shortages that began during the pandemic when construction projects were delayed.

Many expected housing units were pushed back by several years, creating a supply-demand imbalance when workplaces resumed in-person operations in 2022. “The housing supply that was supposed to come in 2020-21 got delayed by 2-3 years. That pushed rents up by 30-40 percent in some areas,” said Gundeep Singh, founder and CEO of Simplease. “As new supply comes online in the next 12-18 months, we expect rental growth to stabilise back to the usual 5-10 percent range.”

'Brokers also to be blamed'

The role of brokers in driving up rental costs is another point of contention. Many brokers have taken on property management responsibilities for absentee landlords, gaining power of attorney and significant control over rents and lease agreements.

“In some markets, brokers handle everything—from arranging security to overseeing repairs and maintenance,” said Jayesh Rathod, director of The Guardians Real Estate Advisory. “They dominate around 80-90 percent of the rental market in Mumbai.”

Unlike brokers handling primary sales, those brokering rentals or secondary sales are not required to register with the Real Estate Regulatory Authority (RERA). Rathod believes expanding RERA’s purview to include more types of transactions, such as rentals, could bring some much-needed transparency and oversight to the market.

Apart from broker influence and supply-demand dynamics, redevelopment projects are also distorting rental prices in certain suburbs. Redevelopment is a significant driver of new housing supply in Mumbai, with about one-third of new launches coming from such projects. During these redevelopments, developers often subsidise or cover the rent for displaced residents, further tightening the rental market in areas like Bandra, Juhu, Andheri, and Ghatkopar.

Comprehensive housing policy for rental market

To address these challenges, experts are urging policymakers to implement key policy changes to develop a comprehensive housing policy, aimed specifically at the rental market. Maharashtra is yet to adopt the Model Tenancy Act, passed by the central government in 2021, which could unlock more rental housing supply and provide a framework for resolving disputes between landlords and tenants.

“A rental housing ecosystem is urgently needed,” said Aarti Harbhajanka, founder and managing director of Primus Partners India. “Currently, all housing schemes focus on ownership. The Model Tenancy Act could help streamline the sector by balancing power between landlords and tenants and mandating dispute resolution through special courts. But Maharashtra has not adopted it yet, largely due to concerns over its impact on residents who currently pay low, controlled rents.”

In addition to policy changes, Harbhajanka suggested that direct intervention to increase rental housing supply—such as government-funded development projects or purpose-built housing for students and working professionals—could help alleviate some of the pressure on the market.

With rents continuing to rise and the city’s housing supply stretched thin, the need for a coordinated response from both policymakers and developers is becoming increasingly urgent. Only a multifaceted approach, combining regulatory reforms with targeted development, can  stabilise Mumbai’s volatile rental market.