Rent rates soar by 10-15% in suburbs

MORE DEMAND, FEWER FLATS

Mumbai: With no meaningful correction in property prices expected before Diwali, the residential rental business has been receiving a fillip in the suburbs that have witnessed an almost 10-15% increase in rates in the past 10 to 14 months. 
    However, rents in south Mumbai have either dipped by 10% or they have been stable due to oversupply of flats, say real estate brokers. 
    Experts have attributed the rise of rents in the suburbs to the fact that more 
number of people are willing to stay on rent rather than shell out a huge amount to buy a flat. 
    Industry experts said a two-bedroom-hall-kitchen flat in a building located almost 7 km from Goregaon at Dindoshi is earning a monthly rent of Rs 37,000 to Rs 38,000, while the same apartment earned Rs 17,000 to Rs 20,000 in 2010. Due to its location and proximity to an international school, a 2.5-BHK apartment in Goregaon is demanding a rent of Rs 65,000 to almost Rs 80,000 a month. In Juhu, the amount for a 2-BHK is now Rs 90,000 a month, but in 2009-10, the same flat was rented out for Rs 60,000 only. 
    A study carried out by real estate portal 99acres.com showed that rentals are appreciating in localities like Kamothe, Seawoods and Sanpada. "The rates in those places have increased by 22%, 16% and 14% in a year. Nerul, Vashi and Kharghar have witnessed a rise by 6%," the study said. 
    "In many cases, corporates' house allowances have been slashed following the poor economic condition. So, many extend their leases as they have a clause of raising rent by 10%," said Ram Prasad Padhi of Mumbai Properties. 
    Two developers in eastern suburbs have asked brokers and owners to pay them a month's rent once they leased out their flats. "One developer could make such a demand as he has not yet conveyed the land to the society," said a broker. "The other builder plans to rent out the entire building of about 30 flats on rent. He apparently wants to sell the flats but not offering a discount of more than 10%."