India Rental Housing Market to Reach USD 4.0 Billion by 2033 | 4.56% CAGR | Get Free Sample Report

India Rental Housing Market Outlook

The India rental housing market size reached USD 2.7 Billion in 2024 and is expected to grow to USD 4.0 Billion by 2033, exhibiting a CAGR of 4.56% during the forecast period of 2025-2033. The market is driven by rapid urbanization, migration, rising property prices, and increasing demand for affordable housing options such as apartments, independent houses, co-living spaces, and PG accommodations catering to various income segments.

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India Rental Housing Market Study Assumption Years

• Base Year : 2024
• Historical Year/Period : 2019-2024

India Rental Housing Market Key Takeaways

• Current Market Size : USD 2.7 Billion
• CAGR : 4.56%
• Forecast Period : 2025-2033

• The market growth is propelled by rapid urbanization with migration to urban centers fueling rental housing demand.
• Rising property prices, especially in metros like Mumbai, Delhi, Bangalore, and Hyderabad, are increasing the affordability gap, driving rental demand.
• Government policies including the Model Tenancy Act and Pradhan Mantri Awas Yojana (PMAY) support a structured rental framework.
• Increasing preference for affordable rental housing complexes and co-living spaces caters to students, professionals, and families.
• The industrialization and development of IT/corporate parks contribute to higher demand for rental accommodations.

India Rental Housing Market Growth Factors

Rapid urbanization and migration mainly drive the rental housing market in India because many people migrate to urban areas. People seek better employment opportunities and a better standard of living. The World Bank Group forecasts in the report that 600 million will live in urban areas by 2036, 40% of India's population against 31% in 2011. This creates important rental housing demand in Tier-1 and Tier-2 cities where most professionals and students rent homes due to the high cost of buying property and need for job mobility.

The housing market is further fueled by increasing property prices. Capital values of the National Capital Region (NCR) market have seen fast rises: up 128% to Rs 13000 per sq. ft. in the past few years. For example, areas like the Sohna Road in Gurugram have seen a 59% appreciation in property prices from 2021 to 2024. This escalated property price, combined with the high cost of down payments, home loan interest rates, etc. has forced people from the middle and lower sectors to become renters.

The government laws, rules, and policies such as the Model Tenancy Act and introduction of a rental housing policy are encouraging the industry by providing tenants and landlords legal protection and reducing disputes. The schemes such as the Pradhan Mantri Awas Yojana (PMAY) and the Smart Cities Mission measure to encourage affordable rental housing, incentivize the private sector, and house migrant workers affordably. The government continues to develop Affordable Rental Housing Complexes for the sake of increasing the rental housing supply.

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India Rental Housing Market Trends

India's rental housing market is characterized by rapid urbanization with migrants moving to metropolitan areas and to larger cities for employment and education. Renting has become more common for job transfers and the high cost of home purchases, and is a common practice among students.

Most of the impact of urban rental demand growth is seen in metro and Tier-1/Tier-2 cities. The development of industrial parks, IT parks and corporate office spaces around these cities have also led to an increase in rental demand. Additionally, government initiatives such as the Smart Cities Mission are also driving urban rental demand.

Affordability is a challenge because housing prices in the major cities have been rising rapidly. The difference between prices and incomes needed for ownership is increasing. The capital values in NCR and Gurugram have increased rapidly making housing unaffordable. This problem has pushed middle and lower income people towards rental housing solutions.

The Government is also improving the regulated rental market by protecting the interests of landlords and tenants through the Model Tenancy Act and encouraging the addition of more housing stock to the rental market. Other schemes for affordable rental housing for migrant workers are nascent but are also expected to expand the quantum of rental housing over time.

Co-living spaces, PG accommodations, and affordable rental housing projects are becoming popular, as they cater to the need for short-term, flexible housing for professionals, students, and families.

India Rental Housing Market Segmentation

Type Insights:

• Standalone Spaces: Independent units catering to individual rental needs.
• Society Based: Rental housing situated within residential societies providing shared amenities.

Size of Unit Insights:

• Up to 400 square feet: Compact rental units suitable for single occupants or couples.
• 400-800 square feet: Medium-sized units balancing space and affordability.
• Above 800 square feet: Larger units accommodating families or groups seeking more space.

Property Type Insights:

• Fully Furnished: Rental properties equipped with complete furniture and appliances.
• Semi-Furnished: Properties with partial furniture or appliances provided.
• Unfurnished: Bare rental units without furniture, allowing tenant customization.

Regional Insights

• North India
• South India
• East India
• West India

The North India region generally dominates the rental housing market due to significant urban and industrial development. The overall market is projected to grow at a CAGR of 4.56% during 2025-2033. This growth is fueled by expanding urbanization and increasing property prices across these regions.

India Rental Housing Market Key Players

The report offers an in-depth examination of the competitive landscape, including market structure, key player positioning, leading strategies for success, a competitive dashboard, and a company evaluation quadrant.

India Rental Housing Market Recent Developments & News

• In March 2025, the Haryana government launched the Affordable Rental Housing Scheme under PMAY (Urban) 2.0 to provide budget-friendly rental homes to EWS and informal sector workers. The pilot program includes leasing 1,600 apartments in Sonipat with a budget allocation of Rs 2444.27 crore for 2025-26.

• In February 2024, the Government of India announced plans for a new program assisting middle-class segments in purchasing or building homes. The Union Finance Minister mentioned this initiative targets middle-class residents living in rental homes, slums, chawls, or unapproved colonies.

India Rental Housing Market Key Highlights of the Report

• Comprehensive quantitative analysis of market segments and historical and current trends.
• Detailed market forecasts between 2025 and 2033 covering type, unit size, property type, and region.
• Assessment of industry catalysts, challenges, and competitive landscape including company profiles.
• Inclusion of Porter's five forces analysis to evaluate market competitiveness.
• Insights into government policies and their impact on rental housing demand.

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