by THO
A total of 1.90 lakh rental agreements, also known as leave and license agreements, were registered in Mumbai’s real estate market in the first six months of 2024 – a 13% increase from 1.67 lakh rent agreements registered during the same period in 2023. These were registered across all segments – residential, commercial and retail, according to the data shared by the Maharashtra Inspector General of Registration (IGR).
In 2022, 1.55 lakh rental agreements were registered during the same period.
Overall in 2022, 3.06 lakh rental agreements were registered in Mumbai that went up to 3.33 lakh in 2023. In 2024, around 2.09 lakh rental agreements were registered from January 1 to July 18.
According to real estate consultants, the rental agreement registration data indicates that more buildings are going in for redevelopment. Additionally, this increase can be attributed to increased commercial and retail leasing.
Is redevelopment of old buildings in south Mumbai leading to an increase in rental demand?
In 2023 and 2024, there has been an uptick in commercial leasing in South Mumbai, but an increase in residential leasing is significant.
“The reason is that many small, old buildings are now being redeveloped in South Mumbai, leading to higher rental demand in the residential segment. However, in 2025-26, there is a chance that rental demand and supply will match due to the completion of many projects,” said Pramod Vyas, President of SMART (South MetroCity Association of Realtors), the apex body of real estate consultants from South Mumbai.
“The rental agreement registration going up by 13% according to the Maharashtra IGR data indicates that demand for rental properties has gone up in the city. However, when it comes to the residential segment, the surge can be attributed to a large number of old buildings in South Mumbai and parts of Central Mumbai going in for redevelopment owing to which there is more demand for rented accommodation in those areas,” said Dhiren Doshi, a real estate consultant based out of western suburbs in Mumbai.
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In areas between Borivali to Malad, redevelopment of old buildings has hit a saturation point.
There was a mad rush in 2022 and 2023 due to which there was a lot of demand for renting apartments in the last two years, but that has corrected in 2024. Along with this, there is cooling off in rentals too.
“Also, majority of flats given on rent in the last two years in areas like Borivali and Kandivali were leased for three years and these will start coming into the market from mid or end of 2025. This will lead to an increase in supply as more buildings will complete construction post redevelopment. For demand during that time, we will have to wait and watch how it shapes up,” Doshi added.
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Has rental growth cooled down in Mumbai?
Rental growth across premium gated societies in Mumbai has cooled down to 5-9% in 2024 after a growth of almost 50-60% in the last two years between 2021-23, according to data shared by Zapkey.com research.
A 3BHK apartment in a premium building in the Andheri area of Mumbai was available for a monthly rent of ₹77,000 in 2021, which went up to ₹1.14 lakh in 2023 as redevelopment of old buildings in Mumbai picked up pace. Rents are currently hovering around ₹1.18 lakh per month due to increase in supply of redeveloped homes in the city, indicating that the quantum of increase has gone down, consultants said.
