The continued ups and downs created by COVID-19 surely created a surge all over the world. The pandemic in India has made the Indian real estate market largely resilient, which is why the sector is showing signs of revival and getting back on track. Growth projects across segments like offices, residential and other real estate have taken a strong position to uplift the global economy. After the second pandemic wave, the government in 2022 will be highly focused on the betterment of the infrastructure. The growth in leasing activity across sectors has witnessed an uptick and will continue to rise in 2022.
Many office spaces are going to be operational in 2022. With the hybrid working lifestyle and physical offices, the need for occupiers for office space is expanding. With the collaboration of workplace strategies in India, the means of productivity level is going to increase.
Rental Property Demand Rises in These Metro Cities
The demand for rental property is rising, especially with the upliftment of lockdown, people are coming back to offices for which they are also looking for rental accommodation. Hyderabad, Mumbai, Ahmedabad, Chennai and Pune have experienced rental property growth of 10–20%. Whereas cities like Kolkata, Bengaluru and Delhi have recorded an increase in rental property by 2-7%. The rental property demand will continue to rise throughout 2022, especially in investment grade, tech and strategically located assets.
The Reason Behind the Rise in the Rental Property in These Metro Cities
Because of the robust sales momentum, real estate developers are forced to pass on the increase to homebuyers. Earlier the low-interest rates opened an opportunity for first-time buyers to buy a property. The interest rates are going to rise in 2022, which means the rental property is predicted to experience an increase in competition as renting is a more suitable option than buying.
Factors Why Landlords Raise Rents
Tenants usually don't welcome a rise in rent. Nevertheless, it is not a treat for landlords either! High prices are not a treat to anyone. Everyone goes to grocery stores, has families to cater to, and wants to take care of their health, so what goes behind the scenes of the rise in rent we will get to know today. So there are some reasons why landlords raise rents-
1. Increase in Expenses
Taxes and insurance on a property are likely to hike in 2022, so necessary materials will be made mandatory to install. The owners tend to keep costs under control, but they surely have some margins of profit which they hope they can make. So the only choice they are left with is to increase the rent rates.
2. Renovations
As the COVID-19 outburst hit the world, people now prefer home based on their health and wellness. The year 2022 for the real estate sector is highly lucky and will bring a steady recovery for rental, residential and commercial. To improve the living of tenants, landlords try to fix things like adding more plants, replacing broken windows, new clean roofs, and new appliances, which make a desirable place for people to live. So landlords have the tendency to continuously improve the rental property to get hold of their potential tenants. Upgradation and renovation surely require money which the landlord pays. To receive back what they have invested they increase the rent.
3. Local Market Improvement
When the locality improves, the prospect of living there improves. As we have studied economics at the time we were in school- the increased demand leads to the increased prices. In the same manner, when new businesses like schools, hospitals, park public transportation move into a locality, the demand for living there increases. Tenants usually get unhappy with the rise in rent, but they surely can't find anything cheaper in the same location.
Tenants get angry and unhappy with the increase in rent, but it is better to understand the reason behind it first. When your landlord professionally approaches you with a valid reason for the increase in rent, it is better to understand the market situation.
How to Negotiate a Rent Increase?
Surely you all have understood the above-stated points and saw the other side (landlords) of why the demand for rental property is rising and what are the reasons behind such an increase in rent. But let's see the reality here; it is not certain the landlord your friends encounter you will encounter them too. So if you are in a guilty dilemma after reading the above points, but those points are not the reason why your landlord is increasing rates, then you don't have to feel guilty! Below are the simple tips and tricks on how you can avoid rental values-
1. Refer to Rent History
You, being a tenant, must never give up. The reality is the rent amount quoted to you is never a final figure, and there is always hope for negotiation. Please keep track of previous rents paid and show them the trend before the due date. You have to be fearless; tell them and show the receipts if you have invested in some repair or maintenance your landlord was supposed to do.
2. Know Your Worth
It's better to know your worth as a tenant. Today as the economy is steadily getting back on track, everyone wants to live in a well-maintained home. You can use this and ask for a rebate by showing how good you are at keeping the rental property as beautiful as it can be.
3. Compare the Rental Property in Your Neighbourhood.
A sudden increase in rent is surely not acceptable. You, being a tenant, have more than one rental property option, and landlords are well aware of this fact and work accordingly. So, it is not only one rental property available to you but many. If it's the first time you are looking for rental property, you can consult with real estate developers and determine the minimum rent. And if suddenly the landlord proposes a rent increase, suggest to him the current statistics, or you can always have the option to switch. But remember- don't forget to be polite!
Also read - Rent in NCR: How much will you have to pay in Gurugram, Noida, and Faridabad?