India Rental Housing Market is expected to grow at a CAGR of 4.56% Through 2030

Expanding gig economy and burgeoning millennial population are significant factors driving the growth of the India rental housing market during the forecast period of 2026-2030.

According to TechSci research report, “India Rental Housing Market - By Region, Competition Forecast & Opportunities, 2020-2030,” One of the primary drivers of the semi-furnished segment’s popularity is its cost-effectiveness. Fully furnished apartments often come with a premium rental price due to the inclusion of comprehensive furniture, the India Rental Housing Market is expected to register a robust growth and expand during in the coming years. the India rental housing market is expected to grow at an impressive rate during the forecast period on account of the increasing urbanization and disposable income. This has led to the migration of people in search of jobs and for educational facilities from Tier 2 cities to Tier 1 cities. This in turn is expected to positively influence the market growth through 2028. Additionally, paradigm shift from joint families to nuclear families is also expected to propel the market growth. People have started moving out of their families and are living in rented properties where they can live an independent life. Furthermore, the sudden outbreak and spread of the COVID-19 pandemic in the country and with prevailing lockdown conditions, the government has come up with an economic package to give a push to the country’s economy, which was completely shut down during this lockdown. The government has made an announcement of providing affordable rental housing facilities to the migrant workers and poor who have drastically been impacted by the pandemic and lockdown. The government is planning to convert the government funded properties into affordable rental housing complexes. Also, the government has announced providing subsidies and tax benefits to any private organization or builder who will be providing rental housing. However, increase in number of vacant stocks in cities might hamper the market growth through 2025. Besides, poor maintenance of the rented property might also restrict the market growth. Additionally, low rental yield especially in case of standalone spaces & villas and the old apartments & buildings might further restrict the market growth. Also, the concerns of forceful possession of property can further impede the market growth. Furthermore, security deposit issues can also hinder the market growth.

Shared rentals are in high demand as India is expanding gig economy and burgeoning millennial population. Home ownership is secondary for the millennial generation in favor of job mobility and location flexibility. Homes are instead seen as temporary possessions that can be improved as a person progresses in life. This one-of-a-kind demand opportunity created by millennial spending proclivity has attracted a lot of private equity investment and a new generation of entrepreneurs to the co-living segment. Many developers have made plans to enter the co-living market, including the Bengaluru-based Puravankara and Embassy Group. Hotel chains like Oyo Hotels & Rooms and Lemon Tree Hotels, which are exploring the fully managed housing rentals market for the millennial age group, have shown a lot of interest in this subsegment of the rental housing market. Young people are attempting to avoid the numerous issues that come with renting an apartment, such as brokers dominating the disorganised and fragmented landscape, arbitrary rules, crowded housing space, and disputes with landlords, as they relocate to new cities. While the co-living market and other short-term rental option businesses are thriving, the employer-provided housing trend is fading.

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Based on property type, the Semi-furnished segment dominates the market in the forecast period. In the Indian rental housing market, the semi-furnished segment has emerged as the dominant property type, driven by a balanced mix of convenience, affordability, and flexibility that appeals to a wide range of tenants. Semi-furnished properties typically come equipped with essential furniture and appliances, such as wardrobes, beds, kitchen cabinets, and basic electronic items like fans, lights, and sometimes air conditioners and refrigerators. This setup provides a practical solution for tenants who seek the convenience of a ready-to-move-in home without the commitment and higher costs associated with fully furnished properties.

One of the primary drivers of the semi-furnished segment’s popularity is its cost-effectiveness. Fully furnished apartments often come with a premium rental price due to the inclusion of comprehensive furniture and modern amenities. In contrast, semi-furnished homes offer a middle-ground, providing necessary furnishings at a more affordable rent. This makes them particularly attractive to middle-income tenants, young professionals, and families who need basic setup assistance but prefer to avoid the higher costs of fully furnished units.

Flexibility is another significant factor contributing to the dominance of the semi-furnished segment. Tenants in semi-furnished apartments have the flexibility to personalize their living space with additional furniture and decor of their choice. This allows them to create a home environment that reflects their personal tastes and preferences while benefiting from the essential furnishings already provided. This balance between convenience and personalization is a key selling point for many renters.

The semi-furnished segment also caters to the transient nature of urban living in India. Cities like Bangalore, Mumbai, Delhi, and Hyderabad see a high influx of migrants due to job opportunities and educational prospects. For these migrants, semi-furnished apartments offer a practical solution as they provide the necessary comforts without the burden of moving or purchasing large furniture pieces, which is ideal for those who may have to relocate frequently due to career or educational commitments.

Landlords and property developers also favor the semi-furnished model as it attracts a broad tenant base and reduces the wear and tear associated with fully furnished apartments. Providing a basic level of furnishing ensures that the property is more attractive to potential tenants, leading to higher occupancy rates and reduced vacancy periods. Additionally, semi-furnished properties require lower maintenance and replacement costs for the landlords compared to fully furnished units, which can incur significant upkeep expenses over time.

The dominance of the semi-furnished segment in the Indian rental housing market can be attributed to its affordability, flexibility, and practicality, which resonate with a wide spectrum of tenants. This property type effectively bridges the gap between unfurnished and fully furnished apartments, catering to the needs of urban dwellers seeking convenience and cost efficiency without sacrificing the ability to personalize their living spaces. As urbanization and migration trends continue, the demand for semi-furnished rental housing is likely to remain strong, reinforcing its pivotal role in the market. 

Major companies operating in the India rental housing market are:

• NestAway Technologies Pvt Ltd.
• Zolostays Property Solutions Private Limited
• Ziffy Homes India Pvt Ltd
• Coliving, Inc.
• Life Ltd
• DTwelve Spaces Private Limited
• Grexter Housing Solutions Private Limited
• Housr Technologies Pvt. Ltd.
• Stayabode Ventures Private Limited
• SimplyGuest

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“India rental housing market is expected to witness significant growth during the forecast period on account of the increasing affordability or budget constraints for home ownership. Additionally, availability of suitable rental housing options with all facilities and amenities at a good location is further expected to propel the market growth. Furthermore, the presence of real estate dealers and rental housing provider companies, which help in providing desirable properties according to the need and budget, is expected to create lucrative opportunities for the market growth through 2028.” said Mr. Karan Chechi, Research Director with TechSci Research, a research- management consulting firm.

“India Rental Housing Market  By Type (Standalone Spaces, Society Based), By Size of Unit (Up to 400 square feet, 400-800 square feet, above 800 square feet), By Property Type (Fully Furnished, Semi-Furnished, Unfurnished), By Region, Competition Forecast & Opportunities, 2020-2030,” has evaluated the future growth potential of India Rental Housing Market and provides statistics & information on market size, structure, and future market growth. The report intends to provide cutting-edge market intelligence and help decision-makers take sound investment decisions. Besides, the report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in the India Rental Housing Market.

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