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.

According to TechSci research report, “India Rental Housing Market - By Region, Competition Forecast & Opportunities, 2020-2030F,” India Rental Housing market was valued at USD 20.31 Billion in 2024 and is expected to reach USD 26.78 Billion by 2030 with a CAGR of 4.56% during the forecast period. 

One of the primary drivers of the Indian rental housing market is the rapid urbanization and migration from rural to urban areas. Over the past few decades, India has experienced significant population growth, with millions of people moving to cities in search of better employment opportunities, education, and healthcare. This migration is particularly pronounced in Tier 1 and Tier 2 cities like Delhi, Mumbai, Bengaluru, Pune, and Hyderabad, which attract large numbers of job seekers and young professionals. As urban areas expand, the demand for rental properties increases. Not everyone can afford to purchase property, especially in large metropolitan areas where home prices are often out of reach for many. Renting provides a practical solution, offering mobility and flexibility for people who are unsure of their long-term location due to career or personal reasons. As a result, more people opt to rent, whether in shared accommodations, apartments, or houses, to meet their immediate housing needs. Additionally, the rise in smaller nuclear families and individual living arrangements contributes to the increased demand for rental properties. Young professionals and students, who are often unable to afford homeownership, are turning to rental homes for accommodation. This trend is expected to continue as India’s urban population increases and migration patterns shift.  The trend of urbanization, coupled with a growing workforce, has made rental housing a viable option for many, making it a significant driver of the market’s growth.

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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. 

Based on region, North India is rapidly emerging as the fastest-growing region in India’s rental housing market due to several key factors, including economic growth, urbanization, improved infrastructure, and rising demand for affordable housing. Cities like Delhi, Noida, Gurugram, Chandigarh, and Jaipur are seeing a surge in rental demand, making the region a focal point for real estate growth. North India, particularly the National Capital Region (NCR), is home to some of India’s largest economic hubs, offering numerous employment opportunities. The region has witnessed significant industrial growth, with sectors like IT, finance, manufacturing, and retail contributing to increased job creation. As a result, the influx of young professionals and migrants from other regions has significantly increased demand for rental housing.

The process of urbanization in cities like Delhi, Noida, and Gurugram is another key factor driving rental demand. With expanding job markets, educational institutions, and healthcare facilities, more people are migrating from rural areas to urban centers, seeking rental accommodations. As North India becomes an urbanized hotspot, the need for rental housing, particularly in the affordable and mid-range segments, continues to rise. Infrastructure development, including the expansion of metro systems, highways, and international airports, has played a crucial role in the region’s rental housing growth. Projects like the Delhi Metro, the Rapid Metro in Gurugram, and improved connectivity between NCR cities have made commuting easier, further fueling the demand for rental properties in both prime and peripheral areas. 

Major Companies Operating in the India Rental Housing Market are:

• NestAway Technologies Pvt Ltd.
• Zolostays Property Solutions Private Limited
• Coliving, Inc.
• Airbnb, Inc.
• Zillow Group   
• OYO Rooms
• Rent Group Inc.
• Booking Holdings Inc.

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“The India rental housing market presents significant opportunities driven by rapid urbanization, a growing workforce, and increasing migration to metropolitan areas. With rising demand for affordable housing, particularly in cities like Delhi, Bengaluru, and Mumbai, there is a strong potential for rental properties in both the affordable and mid-segment categories. Additionally, the emergence of co-living spaces, technological advancements in property management, and evolving consumer preferences for flexible rental terms offer further avenues for growth. The government's focus on affordable housing and infrastructure development further strengthens the market’s potential, making it an attractive space for investors and developers.” 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, 2020-2030F,” 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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