After real-estate developers, Mumbai landlords face rental crisis amidst economic slowdown

After real-estate developers, Mumbai landlords face rental crisis amidst economic slowdown

Create your Web Presence with Namecheap5618 After real-estate developers, Mumbai landlords face rental crisis amidst economic slowdown

Covid-19 pandemic has left all sectors of the economy including the housing industry, in distress. Along with the real-estate developers, the landlords too are facing the brunt of it.
The Maharashtra government provided a helping hand to developers by slashing stamp duty on August 26, 2020.
For apartment owners in Mumbai, however, things have only moved from bad to worse as rentals continue to slump further.
Even as the lockdown started easing in June, it was seen that the rents in Mumbai had been trimmed by 15 to 20 per cent.
All because of the fact that the pandemic posed serious financial conditions for the general public which led to job losses or sharp pay cuts.
This led to non-payments or reduced payments of rents by many tenants. Flexible and smart landlords however agreed to re-negotiate rents downwards for a limited period with their existing tenants.
The ones who remained stubborn and let go of their tenants have paid dearly with the consequences.
In a circular issued in April, Additional Chief Secretary (Housing Department) Sanjay Kumar also asked landlords not to drive tenants out of their homes if they fail to pay rents during the current period.
The official noted financial transactions have not been taking place across markets and factories due to the lockdown, and this had a bearing on income and employment of people.
A combination of work from home, job loss as well as a subdued economic environment thereafter crushed demand for rentals in the commercial capital of India.
The volume of registrations between January to October 2020 is down 34 per cent in comparison to last year.
Money Control did a detailed check with the brokers of the city to get a clear picture of the scenario. And after several interactions over the last few weeks things were clear.
As per Money Control report, by the 1st week of November, rentals quoted by landlords were down 25 per cent from pre-Covid-19 levels at a median level in Mumbai.
In the case of premium properties, quotations have dropped deeper anywhere between 30 – 40 per cent
According to an example, data from real-estate aggregator Zapkey shows that Lodha’s The Park project has seen the prices of executed rental transactions drop from levels of over INR 220,000 in December 2019 to levels of INR 140,000 in October & November 2020. The rates are for apartments with the same index area of 1,526 square feet.
Detailed survey suggests some locations are more impacted than the others. Money Control reveals that the eastern suburb of Powai & Chandivali are the worst affected.
In locations like the suburb of Bandra that had often seen landlords take tenants for granted, this is an overdue correction. In fairness, the landlord treatment to tenants is not only a Bandra specific problem but is a Mumbai problem.
A NoBroker survey last year revealed that more tenants in Mumbai vacated their apartment due to an ‘uncooperative landlord’ than tenants in other metro cities. 13 per cent of tenants in Mumbai shifted out due to this factor in comparison to 4 per cent in Hyderabad, 7 per cent in Bangalore, 8 per cent in Pune and 11 per cent in Chennai.
It is hard to predict how much lower it can go from here but it is reasonable to expect that until March 2021 it will in all likelihood only get worse.
Most large companies have announced Work from Home atleast until that period. With every successive month of vacancy, the anxiety is only poised to increase.

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