Mumbai's Rental Market Cools Down: Supply Increases and Redevelopment Slows
Residential rents in Mumbai, which had seen a significant rise in 2023 and 2024, are now cooling down as supply increases and redevelopment projects slow down in most suburbs.
MumbaiReal EstateRental MarketRedevelopmentHousing SupplyReal Estate MumbaiJul 14, 2025
The increase in rents in the two previous years was largely due to the reversal of work-from-home arrangements, leading to a one-time 'abnormal' uptick in rents, amid a supply shortage right after the COVID-19 pandemic. Some observers stated that the surge in residential rents in Mumbai was driven by redevelopment projects, with hundreds of housing societies, primarily in the western suburbs, being demolished prior to redevelopment. This led to a surge in demand for rental housing as developers usually cover nearly all the transit rent for residents elsewhere.
'Rent increase moderating'
Rent increases have definitely started to moderate, and they are now in the 7-8 percent range this year in most micro-markets in Mumbai, said Saurabh Garg, co-founder and chief business officer at NoBroker, a property technology firm. According to brokers, rent increases in western suburbs such as Andheri, Goregaon, Malad, and Borivali have come down to levels mirroring regular inflation, while those in Bandra, Khar, and Santacruz remain slightly higher.
Rents in Bandra are ranging from Rs 85,000 to Rs 1 lakh for a two-bedroom apartment, while in Andheri (West), residential rents are being quoted around Rs 55,000 to Rs 70,000, depending on the location and the age of the apartment. Further, there was a shortage in housing supply across most micro-markets, due to a new launch-and-construction cycle right after the pandemic, brokers said. Most residential projects require around 4-7 years to be built.
A project's lifespan is between 4-7 years. While there was a slowdown in supply and construction for nearly two years due to the pandemic, some of the projects launched just after the pandemic are nearing completion. This is increasing supply in the market and that is decreasing the quantum of rent increases, said Gundeep Singh, CEO of Simplease, a property technology firm.
The pace of redevelopment projects in Mumbai has also slowed in recent months, brokers said, reducing demand for rental housing. According to brokers, while some of the slowdown may be related to concerns over a fall in housing demand, regulatory reasons have also reduced the pace of projects. Many redevelopment projects are stuck due to delay in environmental permissions. In a suburb like Dahisar, the redevelopment of homes belonging to 7,000 families are stuck because environmental permissions are not coming through. That has caused demand for rental housing to come down. Till Diwali, major increases in residential rentals are not expected, said Chintan Vasani, managing partner of Wisebiz Realty.
Frequently Asked Questions
What caused the significant rise in rents in Mumbai in 2023 and 2024?
The significant rise in rents in Mumbai in 2023 and 2024 was largely due to the reversal of work-from-home arrangements, leading to a one-time 'abnormal' uptick in rents, amid a supply shortage right after the COVID-19 pandemic.
How have rent increases in Mumbai moderated this year?
Rent increases in Mumbai have moderated to around 5-10 percent year on year (YoY), down from more than 20 percent in the previous years.
Which suburbs in Mumbai have seen the most significant decrease in rent increases?
Western suburbs such as Andheri, Goregaon, Malad, and Borivali have seen rent increases come down to levels mirroring regular inflation, while Bandra, Khar, and Santacruz remain slightly higher.
What factors are contributing to the increase in housing supply in Mumbai?
The increase in housing supply in Mumbai is due to projects launched just after the pandemic nearing completion, reducing the quantum of rent increases.
Why have redevelopment projects in Mumbai slowed down?
Redevelopment projects in Mumbai have slowed down due to delays in environmental permissions and concerns over a fall in housing demand.
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