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

Market Overview

The India rental housing market was valued at USD 20.31 billion in 2024 and is expected to reach USD 26.78 billion by 2030, growing at a compound annual growth rate (CAGR) of 4.56% during this period. The rental housing market encompasses the segment of the real estate industry that involves leasing or renting residential properties to tenants for a specified duration. This market includes various property types, such as apartments, single-family homes, townhouses, condominiums, and shared housing arrangements. It serves individuals and families who either prefer not to purchase a home or cannot afford homeownership, providing a flexible and often more affordable housing option. Key stakeholders in the rental housing market include landlords, property management companies, tenants, and real estate agents. Renters benefit from the ability to relocate easily, lower upfront costs compared to buying a home, and freedom from property maintenance responsibilities, which are typically managed by landlords. The rental housing market is influenced by factors such as population growth, urbanization, economic conditions, and housing affordability. Demand is notably high in urban areas and cities with significant employment opportunities, educational institutions, and infrastructure development.

Key Market Drivers

Affordability and Housing Prices

Affordability is a key factor driving the growth of the rental housing market in India. The increasing cost of homeownership, especially in metropolitan areas, has made it difficult for a significant portion of the population to buy properties. High property prices, rising construction costs, and increasing interest rates on home loans have prompted many individuals and families to choose renting over buying. In cities like Delhi, Mumbai, and Bengaluru, where real estate prices are among the highest in the country, the dream of homeownership is out of reach for many, particularly middle-income groups and young professionals. For them, renting presents a more affordable alternative, as monthly rental payments are often more manageable than the substantial financial commitment required to purchase a home. Moreover, fluctuating property prices can render real estate investments risky, particularly in uncertain markets. Renting offers flexibility and imposes a lighter long-term financial burden, allowing tenants to allocate resources toward other priorities. It also eliminates costs related to maintenance, taxes, and other ownership-related expenses. As real estate prices continue to rise and the affordability gap widens, the demand for rental properties is expected to grow. This trend is particularly evident in rapidly expanding urban centers where the high demand for housing outstrips the supply of affordable homes. Consequently, affordability remains a primary driver of the rental housing market, especially in metropolitan cities.

• Nearly 65% of homebuyers in India find it difficult to afford homes in major metropolitan areas due to rising property prices and limited affordable housing options.
• The median home price in cities like Mumbai and Delhi has crossed INR 1 crore (approximately USD 120,000), putting homeownership out of reach for many middle-income families.
• Despite government initiatives, only about 30% of housing projects in India target affordable housing segments priced below INR 30 lakh (USD 36,000).
• Rental housing demand has surged by over 15% annually as affordability issues push more people to seek rental options instead of buying.
• Real estate price inflation in Tier 2 and Tier 3 cities is growing at a rate of 8-10% per year, driven by urbanization and infrastructure development.

Government Policies and Initiatives

Government policies and initiatives significantly shape the rental housing market in India. Various measures and schemes introduced by the government have made rental housing more accessible and appealing to both landlords and tenants. These policies typically focus on increasing the availability of affordable housing, ensuring better regulations, and providing financial incentives. For instance, the introduction of the Pradhan Mantri Awas Yojana (PMAY) and the Model Tenancy Act have been pivotal in regulating the rental market. PMAY aims to provide affordable housing for all by 2022 and includes strategies to incentivize developers to create rental homes. The Model Tenancy Act, introduced in 2021, seeks to streamline the rental process by ensuring fair rent agreements, protecting tenant rights, and providing dispute resolution mechanisms. This act offers a legal framework that boosts investor confidence and encourages more individuals to participate in the rental market, knowing their interests are legally safeguarded. Additionally, the government's focus on affordable rental housing projects, including those under the Housing for All initiative, has stimulated both private and public sector involvement in developing rental properties. These measures not only enhance the availability of rental units but also promote transparency and reliability in rental transactions, which are crucial for the market's growth. The development of rental housing models tailored to various segments of society, such as student housing, co-living spaces, and low-income rental units, has further energized the rental housing market. As these policies evolve, they are expected to facilitate the expansion of rental housing in India.

Changing lifestyle preferences among younger generations and urban professionals are also significant drivers of the rental housing market in India. Millennials and Gen Z are increasingly favoring flexibility, convenience, and mobility—qualities that renting offers over traditional homeownership.

In urban centers, young professionals and students are increasingly choosing rental accommodations, particularly as they relocate for career opportunities or education. These individuals often prioritize the ability to move easily, avoiding the long-term financial commitments associated with buying property. Renting allows them the flexibility to explore new cities or job options without the encumbrances of homeownership. Additionally, the growing popularity of co-living spaces reflects a shift toward communal living and shared experiences. Co-living—particularly popular among students and working professionals—provides affordable and flexible rental options in desirable locations, along with value-added services such as internet, housekeeping, and furnished units. The ease of maintenance, networking opportunities, and cost-sharing arrangements make co-living an appealing choice for those seeking an affordable and social living arrangement. These shifts in lifestyle preferences towards rental properties, especially among younger generations, continue to drive demand for rental housing. The increasing preference for ready-to-move-in, fully furnished homes and shorter lease terms further aligns with this trend, making the rental housing market more dynamic and responsive to changing consumer demands.

• In India, the rental housing market has grown by over 12% annually in recent years, driven by changing lifestyle preferences among millennials and young professionals.
• Approximately 35-40% of urban households now prefer renting over buying, reflecting increased mobility and flexible living choices.
• The demand for co-living and shared rental spaces has surged by nearly 25% in metro cities like Bangalore, Mumbai, and Delhi.
• Around 50% of new renters in India are from the age group of 22 to 35 years, indicating a strong shift toward rental housing among younger populations.
• Rental housing occupancy rates in Tier 1 cities have reached above 85%, fueled by students, IT professionals, and migrant workers.

Download Free Sample Report

Key Market Challenges

Regulatory and Legal Hurdles

One of the primary challenges facing India's rental housing market is the complex and inconsistent regulatory framework governing rental agreements and tenant-landlord relationships. Although laws like the Rent Control Act were initially designed to protect tenants from exorbitant rents, they have led to unintended consequences. These include rental prices that remain below market value and a reluctance among landlords to lease their properties. As a result, many property owners are discouraged from renting out their spaces, leading to significant underutilization of the housing stock. Moreover, the lack of uniform rental regulations across states has further complicated the market. While some states have adapted their rental laws to align better with modern market conditions, others continue to follow outdated, restrictive policies. This inconsistency creates confusion for both tenants and landlords, often resulting in disputes over rent increases, maintenance responsibilities, and security deposit returns. Additionally, enforcement of rental laws is weak, leading to common issues such as delayed or non-payment of rent, property damage, and illegal evictions, leaving both parties vulnerable. A key problem is the absence of a centralized nationwide platform to facilitate rental agreements, dispute resolutions, and tenant screenings. This has created a market where informal agreements are prevalent, lacking transparency and being susceptible to exploitation. Many tenants are hesitant to enter long-term rental agreements out of fear of exploitation, while landlords are reluctant to rent to tenants without formal legal backing. This further exacerbates the supply-demand imbalance. To tackle these challenges, there have been calls for a comprehensive national rental policy, greater standardization in rental contracts, enhanced tenant protections, and the establishment of clear dispute resolution mechanisms. Although the Model Tenancy Act, introduced in 2021, was a step in the right direction, its implementation has been slow and fragmented, with many states yet to adopt it fully. Until these legal and regulatory challenges are addressed, India's rental housing market will continue to face inefficiencies and barriers to growth.

Affordability and Supply-Demand Mismatch

Another significant challenge in India's rental housing market is affordability, which is exacerbated by a persistent supply-demand mismatch. As India's urban population rapidly grows and the number of migrant workers increases, the supply of affordable rental housing is severely limited. High property prices, coupled with inflation in construction costs, make it challenging for developers to build rental properties that are affordable for low and middle-income groups. Consequently, rental rates in major urban areas, particularly in cities like Mumbai, Delhi, Bengaluru, and Chennai, have risen significantly, making decent accommodation difficult for many people to afford. The shortage of affordable rental housing is further complicated by a lack of available properties in key urban centers. Rapid urbanization has led to increased demand for rental homes, but supply has not kept pace. This imbalance often forces tenants to accept overcrowded living conditions or rent properties in less desirable suburban areas far from employment hubs, resulting in long commutes and a reduced quality of life. Additionally, many property owners prefer to lease their homes to high-income tenants who can afford premium rents, rather than offering properties at lower, more affordable rates. For low-income groups, this affordability gap is particularly concerning. Migrants, students, and young professionals moving to cities for better job opportunities are often priced out of the rental market, forcing them to settle for substandard living conditions. Many end up in overcrowded slums or informal housing arrangements that lack basic amenities, such as sanitation, security, and access to public services. The government has attempted to address these issues through initiatives like the Pradhan Mantri Awas Yojana (PMAY) and the development of affordable housing projects. However, these efforts have primarily focused on homeownership rather than rental housing, leaving the rental sector largely underserved. Additionally, many affordable housing projects are often located on the outskirts of cities, limiting accessibility for working-class tenants who depend on proximity to urban job markets. To bridge this affordability gap, there is an urgent need for a structured approach to developing affordable rental housing, as well as policy incentives that encourage landlords to rent to lower-income groups. More investment in low-cost housing, better urban planning, and improved infrastructure in rental housing areas are essential to meet the growing demand for affordable living spaces in India's rapidly urbanizing cities.

Key Market Trends

Rising Demand for Co-Living Spaces

Co-living spaces are rapidly gaining popularity in India's rental housing market, driven mainly by urbanization, a growing young workforce, and the rising cost of living. Co-living refers to a shared living arrangement where individuals, often young professionals or students, rent private bedrooms in fully furnished apartments or houses while sharing common areas such as kitchens, living rooms, and bathrooms. This trend is particularly prominent in metropolitan cities like Bengaluru, Mumbai, Delhi, and Pune, where there is a significant influx of young migrants and professionals. The appeal of co-living spaces lies in their affordability, convenience, and community-oriented atmosphere. These spaces offer flexible rental terms, including short-term leases, which cater to transient populations who may not want to commit to long-term contracts. Additionally, co-living spaces are fully furnished and include amenities like Wi-Fi, housekeeping, and utility services in the rent, making them a hassle-free option for renters. The demand for co-living is also being fueled by the rise of startup culture, tech hubs, and educational institutions in urban areas, which attract a large number of students and working professionals. With the ongoing trend of remote and hybrid working models post-pandemic, co-living spaces provide not only affordable housing but also well-equipped environments for work and social interaction, enhancing their appeal. As this trend grows, developers and property management companies are increasingly focused on creating modern, scalable co-living solutions that cater to the evolving needs of renters, offering flexible, convenient, and community-driven living experiences.

Technology Integration and Digitalization in Rental Transactions

Technology is revolutionizing the Indian rental housing market, making the entire rental process—from property search to lease agreements—more efficient, transparent, and accessible. Digital platforms have transformed the way landlords and tenants interact, significantly reducing the friction traditionally associated with renting properties. Online property rental platforms like NoBroker, Magicbricks, and Housing.com are leading the digitalization trend by offering user-friendly interfaces that enable potential tenants to search for properties, compare prices, and access detailed neighborhood information. These platforms also allow tenants and landlords to negotiate terms and finalize deals without the need for a middleman, thus reducing brokerage costs. Moreover, technology is enhancing the property management process. Smart homes equipped with IoT devices—including smart locks, lighting systems, and energy-efficient appliances—are increasingly common in rental properties, especially in metropolitan cities. This not only makes the living experience more convenient but also offers enhanced security and lower maintenance costs. Another significant technological shift is the growing adoption of electronic rental agreements. Paperless, legally binding contracts are becoming the norm, facilitated by digital signatures and verification platforms. This streamlining of the documentation process ensures quicker lease signings, minimal paperwork, and greater compliance with regulations. Additionally, rental payment apps and digital wallets are simplifying monthly rent payments and automating the rent collection process, benefiting both landlords and tenants. As India’s tech-savvy younger population continues to drive demand, the integration of technology in the rental housing market will only grow, leading to improved efficiency, transparency, and a better overall experience for both parties.

Shift Toward Affordable and Flexible Rental Options

The growing trend toward affordability and flexibility in the rental housing market reflects broader shifts in India’s socio-economic landscape. With rising property prices and increased migration to urban areas, many individuals are seeking affordable rental options that provide value for money without compromising essential amenities. This shift is especially noticeable in cities like Bengaluru, Chennai, Hyderabad, and Mumbai, where rental affordability is under increasing pressure. In response, landlords and property developers are focusing on offering more budget-friendly rental properties to meet the needs of the working class, students, and young professionals who are price-sensitive. Affordable rental housing options, including shared accommodations and smaller apartments, are becoming more prevalent. Renters are increasingly prioritizing functional, cost-effective living spaces over larger or more luxurious homes. Alongside affordability, the demand for flexibility is also rising. Renters seek more adaptable lease terms, such as shorter-duration contracts and rent-to-own options. This flexibility is particularly appealing to the transient nature of India’s workforce, which often involves relocation for career opportunities or changes in personal circumstances.

Segmental Insights

Type Insights

The Standalone Spaces segment held the largest market share in 2024, driven by diverse factors that cater to varied tenant preferences and market demands. Standalone spaces typically include independent houses, villas, and smaller residential units that are not part of larger apartment complexes or gated communities.

One key driver of the standalone spaces segment is the preference for privacy and autonomy among tenants. Many renters, including families and higher-income individuals, favor standalone properties for their exclusivity, larger living spaces, and the freedom to customize their living environment according to personal preferences. This segment appeals particularly to those seeking a detached living experience away from the density and shared amenities of apartment complexes. Additionally, standalone spaces often offer unique features such as private gardens, parking facilities, and more flexible lease terms compared to standardized apartment rentals. These attributes attract a diverse tenant base, including expatriates, senior executives, and individuals with specific lifestyle requirements or preferences.

The market for standalone rental properties is also buoyed by urbanization and evolving demographic trends. As cities expand and suburban areas develop, standalone properties in well-connected neighborhoods become increasingly desirable. Proximity to employment hubs, educational institutions, and essential amenities further enhances the appeal of standalone rentals, driving demand across various demographic segments. Moreover, the standalone segment benefits from a robust resale market, providing landlords with potential capital appreciation opportunities over time. Investors and developers capitalize on this demand by diversifying their portfolios with standalone rental properties, contributing to the segment's sustained growth and market resilience.

Despite its dominance, the standalone spaces segment faces challenges such as regulatory complexities, maintenance responsibilities, and scalability compared to apartment complexes. However, ongoing urbanization, demographic shifts, and evolving consumer preferences continue to bolster the standalone rental housing market's significance and attractiveness within India's dynamic real estate landscape.

Download Free Sample Report

Regional Insights

South India emerged as the dominating region in 2024, South India has emerged as a dominant region in the Indian rental housing market, characterized by robust demand, diverse offerings, and favorable market dynamics. Cities like Bangalore, Chennai, Hyderabad, and Kochi are key contributors to the region's rental housing sector, driven by factors such as rapid urbanization, economic growth, and a burgeoning IT and services industry.

Bangalore, often referred to as India's Silicon Valley, leads the rental market in South India due to its status as a major technology and startup hub. The city attracts a large population of young professionals and expatriates seeking rental accommodations close to employment centers and vibrant urban amenities. This demographic diversity fuels demand for both traditional rental apartments and newer rental formats such as co-living spaces tailored to the preferences of tech-savvy millennials.

Chennai, a major cultural and industrial hub, also plays a significant role in the South Indian rental housing market. The city's thriving manufacturing sector, coupled with its reputation as a center for education and healthcare, attracts a steady influx of migrants and students in need of rental accommodations. Rental options range from affordable housing in suburban areas to upscale apartments in prime locations along the city's coastline.

Hyderabad has emerged as another prominent rental market in South India, driven by its robust IT and pharmaceutical industries. The city's proactive infrastructure development, including metro rail expansion and IT parks, has bolstered its appeal among tech professionals and investors alike. Rental demand is bolstered by a mix of local residents and a growing expatriate community, contributing to a diverse rental housing landscape that includes luxury apartments, gated communities, and affordable housing projects.

Kochi, known for its port activities and tourism industry, has also seen notable growth in its rental housing market. The city's strategic location in Kerala, coupled with infrastructure improvements such as the Kochi Metro, has enhanced its connectivity and livability. Rental properties cater to a mix of local residents, expatriates, and tourists seeking temporary accommodations, with options ranging from waterfront apartments to heritage homes in the city's historic quarters.

Recent Developments

• In April 2025, Luxury real estate firm Tribeca Developers, which develops Trump-branded properties in India, has announced the launch of Trilive, which it calls India's first dedicated rental housing platform, as it is intended to meet demand for quality housing among young, mid-to-high-salaried professionals in major cities.
• In June 2025, Paranjape Schemes partnered with India Housing For All (AIF) and Unity Small Finance Bank to finance and develop “Ananda Athashri,” a senior living community in Varve, Pune. The project achieved early financial closure through an innovative, RBI-compliant structure. Homes are priced 50% below market rates for comparable urban facilities. The initiative aligns with India’s demographic trend, with the senior population expected to reach 231 million by 2050, reinforcing Paranjape's legacy of developing over 4,000 senior-focused homes.
• In May 2025, Star Housing Finance Limited entered into a strategic partnership with Vastu Housing Finance Corporation Ltd to expand affordable housing access for economically weaker sections (EWS) and low-income groups (LIG). Targeting semi-urban and rural India, the collaboration focuses on financial inclusion by offering accessible housing finance solutions. This alliance aims to address the underserved segments by leveraging localized presence, underwriting expertise, and strong capital backing, contributing to inclusive growth in India’s housing finance sector.
• In March, 2025, India launched the Cities Coalition for Circularity (C-3), a multi-country initiative promoting collaboration among cities for sustainable urban development through circular economy principles. As part of this alliance, over 5,000 first-time home buyers from financially weaker sections will benefit from affordable housing support. Star Housing Finance will oversee loan origination and servicing, while Vastu Housing Finance will provide capital, co-underwrite loans, and offer technology and risk-sharing frameworks, ensuring inclusive and efficient delivery of housing finance.
• In June 2025, DLF Ltd announced a INR 5,500 crore (USD 634 million) investment in its upcoming luxury residential project, ‘DLF Privana North’, situated in Gurugram. Part of a larger 116-acre integrated township, this marks the company’s third major initiative in the premium housing segment, following the success of Privana South and Privana West. The development reinforces DLF’s strategic focus on the high-end residential market amid robust demand in key urban corridors, further strengthening its leadership in the luxury real estate space.

 Key Market Players

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

Report Scope:

In this report, the India Rental Housing Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• India Rental Housing Market, By Type:
• Standalone Spaces
• Society Based  
• India Rental Housing Market, By Size of Unit:
• Up to 400 square feet
• 400-800 square feet
• Above 800 square feet  

• India Rental Housing Market, By Product Type:
• Fully Furnished
• Semi-Furnished
• Unfurnished
• India Rental Housing Market, By Region:
• South India
• West India 
• North India 
• East India

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the India Rental Housing Market.

Available Customizations:

India Rental Housing Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

India Rental Housing Market is an upcoming report to be released soon. If you wish an early delivery of this report or want to confirm the date of release, please contact us at [email protected]