Mumbaikars love to rent 2 BHK units, with 42 percent of the total rental demand in the Mumbai real estate market's residential segment coming from 2 BHK units, according to the rental index of Magicbricks, a real estate home search portal.
The second highest demand of all is for 1 BHK units which constitutes 31 percent of the overall demand, followed by 3 BHK units having 23 percent and larger houses (over 3BHK) accounting for just seven percent of the demand, data shows.
On the budget end, per month rent in the range of Rs 10,000 to Rs 50,000 is in most demand, constituting around 45 percent of the demand followed by the range of Rs 50,000 to 1 lakh per month, constituting a significant 39.1 percent of the total demand share and 15 percent in the above Rs 1 lakh per month rent.
The October to December 2023 rental index by Magicbricks, shows that the South Mumbai rental markets lean towards ultra-luxury, while the central and northern markets cater to premium clientele. This establishes a distinct geographical division within Mumbai's rental market.
In the highly preferred localities, the average monthly rent for a 2 BHK apartment is approx. Rs 60,500, while the corresponding figure for 3 BHKs goes up to approx. Rs 87,417 per month, the report said. The above data was derived by Magicbricks based on the preference of over 2 crore customers on Magicbricks platform.
Also read: Mumbai real estate: 27% less units launched in CY23 compared to CY22, 1 BHK ratio goes up
Why 2 BHK?
"Mumbai is an expensive city and most people cannot afford purchasing a home in this city. Thus they opt for rentals and young Indians prefer renting as it gives them flexibility of changing jobs across cities," said Abhishek Kiran Gupta, CEO and co-founder, CRE Matrix, a real estate analytics platform.
He added, "Apart from this, residential rental demand is increasing in Mumbai as it is undergoing large redevelopment of old societies. All these residents have moved to temporary rental homes leading to rise in rental demand. Further, office hubs in Mumbai are concentrated in certain zones such as Andheri, Bandra, Lower Parel. Lot of senior employees prefer living close to their offices thus rental demand for housing close to these office hubs are high."
Also read: Mumbai real estate sees 21% YoY spike in registrations; 500-1,000 sq ft properties dominate
On why people prefer 2 BHK the most, Gupta said "Not only Mumbai, 2BHK sells and rents the most in India and two key reasons for this is that 2BHK is affordable and 2BHK fits family of four, which is generally the case."
Weak rental demand in Q3 FY24:
The rental demand quarter on quarter (QoQ) in October to December 2023 quarter, fell down by around 17 percent, however, Year-on-Year (YoY) the demand in Mumbai rental market grew by a meagre 1 percent. On the supply side, QoQ there is 0.7 percent fall and YoY there is 12 percent. The rentals on the other hand have increased 0.1 percent QoQ and 16 percent YoY.
Overall in top 13 cities of India, Magicbricks report revealed a robust 17.4 percent YoY surge in rents with highest in Gurugram (31.3 percent YoY), Greater Noida (30.4 percent YoY), Bengaluru (23.1 percent YoY), Mumbai over 16 percent, Navi Mumbai over 16 percent, Thane over 17 percent and Pune over 16 percent etc.
Rental registrations in Mumbai
In the city limits of Mumbai, on a monthly basis around 25,000 rental agreements, also known as leave and license agreements, are registered with the Maharashtra government. For example, in January this year, 26,379 rental agreements were registered, 27,494 in December 2023 and 25,211 in November.
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