In Gurugram, Delhi, and Mumbai, the demand for “dollar homes,” or rented housing for expats, is on the rise. Since COVID-19, rents have increased by 40–50 percent, largely as a result of the increased demand for fewer homes with modern amenities.
Brokers claim that the market is just as fiercely competitive as Mayfair in London, where a home listed today on the market often sells within a day. Renters are increasingly bidding higher than one another, which is another trend. The monthly minimum rent is Rs 3 lakh, and the maximum rent is Rs 14 lakh.
It should be noted that these “dollar” homes, which assured landlords of receiving dollars in rent every month, lost their luster soon after the pandemic’s outbreak in 2020.
Expats returning in cities
With the majority of expats returning home, COVID-19 changed the dynamic. However, it is unknown whether or when they will return. Though expats are now back in town as work-from-home is almost over.
Malcha Marg, Shanti Niketan, Jor Bagh, West End, and Vasant Vihar in Delhi are among the preferred neighborhoods, as they are all close to consulates and embassy schools.
According to brokers, rentals for newly redeveloped properties with all modern amenities, fittings, and appliances have increased by more than 40% in the last few months.
According to Sush Clays, Founding Partner of Welcome Home Luxury Real Estate Services, which has assisted expats in setting up residences in India, there is a dearth of newly constructed, modern apartments.
According to her, “expats generally demand modern apartments with high-end kitchen fittings, appliances, bathrooms with branded accessories, and standardized interiors, located close to embassy schools and, to the extent possible, close to the diplomatic zones.”
The fulfillment of these requirements affects apartment rent, she continues.
Lack of independent of bungalows
For ambassadorial level staff, there is a lack of independent bungalows close to diplomatic areas because most of these bungalows have gradually made way for apartments.
“The demand for luxury rental housing has been hit by a supply shortage with more foreign companies opening up shop in the country, an increase in global business tie-ups, and an increase in embassy staff,” she explains.
Finding the best apartment is a race. Finding the ideal apartment with all modern amenities has become as competitive as Mayfair in London. A listing that is available to you today disappears tomorrow. Higher rents and units selling off the shelf in less than a day are the result of tenants outbidding each other, she claimed.
With too many people competing for fewer apartments, the sign-and-go syndrome has become widespread. Younger expats are also requesting smaller apartments (1,600–2,000 square feet) with modern appliances, which is a new trend. “These can cost up to Rs 2 lakh per month in rent,” she said. Additionally, a security deposit for 2-3 months is also required.
A builder floor in Chanakyapuri’s Malcha Marg neighborhood can cost you Rs 3.5 lakh per month. Rental prices for larger plot sizes, which are uncommon, range from Rs 6 lakh to Rs 14 lakh per month (in the case of 1,200 square yard plots on Kautilya Marg).
Newly renovated apartments in the West End neighborhood can rent for as much as Rs 5 lakh per month, while older apartments with modern amenities, if properly maintained, can be equally expensive.
The monthly rent for brand-new apartments in Vasant Vihar ranges from Rs 3 to 4 lakh. Depending on the quality of the property, rents in Shanti Niketan begin at Rs 3 lakh per month.
Depending on the amenities provided, the maintenance for these units can range from Rs 20,000 to Rs 30,000.
Rental costs in Gurugram
The Golf Course Road has also seen a 40 percent increase in rental rates. Several Japanese, Chinese, American, and British nationals live in these opulent condos.
Today, luxury housing units in DLF Golf Links command monthly rents ranging from Rs 5 lakh to Rs 14 lakh.
Apartments in The Aralias, DLF Golf Links, are available for rent starting at Rs. 6 lakh per month, compared to Rs. 2.6–2.7 lakh before the pandemic. The Camellias offers monthly rents ranging from Rs 7.5 lakh to more than Rs 12 lakh. According to the local brokers, the Crest at DLF5, Golf Course Road, has rent starting at about Rs 3 lakh.
According to Mudassir Zaidi, Executive Director, North, Knight Frank India, rental values first rose by 40–50 percent as leasing picked up shortly after the pandemic, and capital values also escalated.
The luxury rental market has experienced exponential growth, according to him, as senior management, both domestic and foreign, has returned to work post pandemic.
According to him, the rent in a given area is determined by how far the apartment complex is from the workplace.
Broker in Gurugram Rishu Chopra notes that transaction values have also doubled. Today, a 16 crore rupee apartment in Magnolias is being sold for 32 crore rupees. Monthly rentals have escalated from Rs 4 lakh to Rs 6.5 lakh. Rentals for a 2,700 sq ft unit in The Crest have increased from Rs 1.25 lakh to Rs 2.75 lakh per month.
Fewer high-end homes are available, but many tenants are competing for them. A few foreigners who would have previously preferred South Delhi have also relocated to Gurugram, considering the services offered, he continued.
According to Akarsh Gujral of Domus Prime Properties, some ambassadors and top executives from around the world prefer to rent out farmhouses. A 2.5-acre farmhouse has five rooms, a tennis court, a pool, and all contemporary amenities. The majority of them are near the airport and Gurugram.
Rental status in Mumbai
In Mumbai, after the expats returned home during COVID-19, the rents of luxury apartments fell by almost 40%.
The same apartments in the BKC neighborhood now fetch a monthly rent of Rs 6.5 lakh. During the pandemic, rental prices reached up to Rs 4.5 lakh. Other apartments in the vicinity of BKC were priced at Rs 1.7 lakh per month (pre-COVID), for a 1,100 square foot (carpeted) apartment. During the pandemic, they had fallen to Rs 1.4 lakh per month. The monthly rent for these properties has reached Rs 2.25–Rs 2.3 lakh.
“Due to redevelopment, Mumbai’s rental housing options have shrunk significantly. Consequently, today’s market is owner-driven. This is one of the factors pushing up the price of luxury home rentals, according to Ritesh Mehta, Senior Director and Head of West and North, Residential Services & Developer Initiatives, JLL.
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