The Indian rental market is undergoing significant transformation in 2025, as evolving work cultures, technological advancements, and rising rent prices reshape the landscape. With an increasing demand for rental properties, tenants must stay ahead of emerging trends to make informed decisions. 

The Indian rental housing market, valued at USD 20.31 billion in 2024, is projected to reach USD 26.78 billion by 2030, expanding at a CAGR of 4.56%. This growth highlights the shift in tenant and landlord dynamics, where understanding market trends is more important than ever. 

In this guide to rental market trends, we will explore the latest shifts impacting tenants and landlords, from evolving rental demands and pricing strategies to the role of technology in property management. Let’s get started.

Skyrocketing Rents in India: What’s Driving the Increase?

Rent prices in major cities like Delhi, Mumbai, Bangalore, Chennai, and Hyderabad are seeing a steady rise. Several factors are contributing to this increase:

• Increased Demand: More people are choosing to rent due to changes in lifestyle, job relocations, and the growing number of people moving to cities for work.

• Economic Conditions: Rising inflation and interest rates are pushing up operating costs for landlords, and these costs are being passed on to tenants.

• Supply Chain Disruptions: The construction of new rental properties is slowing down because of higher building materials and labour costs, creating a shortage of available homes.

• Urban Migration and Job Relocation:
  More professionals are moving to major cities like Bengaluru, Mumbai, and Delhi for better career opportunities. This influx increases demand for rental properties, driving up prices.

• Policy and Regulatory Changes:
  Recent policy changes, like the increase in TDS on rental income, benefit landlords but also lead to higher rent prices, which are passed on to tenants.

What Tenants Can Do:

• Start searching for rental homes early to find the best options at a reasonable price.

• Consider exploring neighbourhoods a bit further from the city centre or in areas still developing, where rents may be more affordable.

• When possible, try negotiating rent prices with landlords, especially if you're committing to a longer lease. Many landlords are open to flexibility to ensure consistent tenants.

• Use property management apps like Crib or online platforms to access detailed rental histories, maintenance records, and real-time price comparisons. This helps ensure you’re making an informed decision.

Now that we know what's driving the increase in rents, let’s examine who’s renting these homes and how their preferences are shifting.

Understanding Tenant Demographics in 2025

Looking at the current rental market, most tenants are between the ages of 25 and 35. The second-largest group of renters is made up of 18 to 25-year-olds. Meanwhile, the number of renters aged 35-45 and 45+ is declining as more people in these age groups are choosing to buy homes instead.

What This Means for Renters

As the rental market evolves, the trends below shape what renters look for in a home.

• Demand for Affordable, Flexible Living Spaces: Younger tenants are seeking rental homes that are affordable, flexible, and close to work.

• Tech-Savvy Rental Processes: Millennials and Gen Z are using apps and online platforms to simplify the search and rental process, ensuring quicker, more informed decisions.

• Preference for Co-Living and Shared Spaces: Rising rents are pushing more young people into co-living setups, where they share costs and responsibilities in a community-style living arrangement.

• Focus on Key Amenities: Renters now expect properties with essential amenities like high-speed internet and gyms, reflecting their lifestyle needs.

As tenant needs evolve, technology is stepping in to help smooth the way. Here’s how tech is making a big impact in the rental space.

The Role of Technology in the 2025 Rental Market

Technology is reshaping how tenants find and secure rental homes in 2025. Several key trends are making the rental experience easier and more efficient:

• Virtual Tours: These are becoming common, allowing potential tenants to view homes from the comfort of their own space without needing to visit in person.

• Smart Home Features: More rental properties are equipped with modern tech, such as keyless entry, smart thermostats, and high-speed internet, catering to tenants who value convenience and efficiency.

• Online Platforms: Real estate apps and websites make it easier for tenants to connect directly with landlords, eliminating the need for brokers and streamlining the rental process.

What Tenants Can Do:

• Make the most of online tools to search for listings, submit applications, and pay rent quickly.

• Look for properties that offer smart home features and reliable internet to enhance daily living.

• Take advantage of apps that allow for seamless, digital lease agreements, reducing paperwork and making the process more efficient.

• Use property management apps like Crib to track your rent payments. These apps will ensure an accurate record and help you with any disputes that may arise.

• Automate rent payments through your property management app to avoid late fees and streamline your monthly budgeting.

By using these tools and strategies, tenants can navigate the rental market more effectively, ensuring a smoother and more informed renting experience.

With tech playing such a key role, let's understand how tenants are seeking more than just a place to live—homes that match their lifestyles.

The Growing Demand for Lifestyle Amenities

Tenants in 2025 seek more than just a place to live; they want homes that enhance their lifestyles. Some of the most popular amenities include:

• In-unit Laundry: Tenants prefer homes with washer/dryer units, making laundry more convenient.

• Outdoor Spaces: Balconies, patios, or access to shared gardens are highly sought after, offering a personal space to unwind.

• Pet-Friendly Policies: As more people own pets, the demand for pet-friendly rental properties grows.

• Co-Working Spaces: With remote work becoming the norm, many tenants are looking for homes that offer co-working areas or shared workspaces.

What Tenants Can Do:

• List the amenities important for your lifestyle, such as outdoor spaces or pet policies.

• Be aware that properties with these popular amenities may have higher rents, so factor this into your budget when searching.

• If you own a car, ensure the property has dedicated parking or nearby options to avoid parking hassles.

Considering these amenities will help tenants find a home that suits both their needs and lifestyle.

As demand for lifestyle-driven spaces grows, competition for rental properties is heating up. Here's why it's becoming tougher to secure a place.

Increased Competition for Rental Properties

With demand for rental properties rising and supply limited, the rental market has become more competitive, especially in popular cities. This means that securing a rental property can be challenging.

What Tenants Can Do:

• Prepare a strong application by having all necessary documents ready, such as proof of income, references, and credit reports.

• Be responsive to inquiries and viewing appointments to ensure you don’t miss out on opportunities.

• If you have concerns about your rental history or income, consider using a guarantor to strengthen your application and improve your chances of being approved.

It's not just about rising rents—tenants are also moving for many reasons. Let's look closer at why people are shifting homes in 2025.

Shifting Preferences: Why Tenants Move Homes in 2025

Tenants in 2025 are moving for a variety of reasons. Some of the most common include:

• Job Relocation: Moving closer to work to save time and reduce commuting costs, ultimately improving work-life balance.

• Space Requirements: As families grow or tenants experience increased income, they often need more space, driving them to find larger homes.

• Rent Increases: Rising rent prices in cities like Hyderabad and Bangalore are forcing tenants to look for more affordable options elsewhere.

What Tenants Can Do:

• Plan your move, especially if rising rents push you to find a new place.

• Research rental prices in different neighbourhoods or cities to find more affordable living options.

• Look beyond city centres for more space and lower rent costs in emerging suburban neighbourhoods.

With shifting preferences in mind, let's focus on the trends shaping the apartment rental market specifically.

Understanding Rental Market Trends for Apartments

In 2025, the rental market for apartments is evolving with technology and tenant preferences. Key trends include:

• Online Platforms: Websites like Crib are increasingly popular, and most renters use them to find rental properties.

• Declining Broker Services: Tenants deal directly with landlords, reducing reliance on brokers.

• Virtual Viewings and Online Payments: These features are becoming the norm, allowing tenants to view properties and make payments online, which saves time and effort.

To understand how this is all playing out, let's consider the broader picture—how is the real estate market in India growing overall?

Compound Annual Growth Rate (CAGR) of the Real Estate Market in India

The real estate sector in India is projected to continue growing at an impressive rate, with substantial increases in both residential and commercial spaces. As the market expands, so does the potential for returns on investment.

• Residential Segment: The residential real estate market is projected to grow at a CAGR of 24.77% from 2024 to 2029, from USD 227.26 billion in 2024 to USD 687.27 billion by 2029.

• Overall Market: The Indian real estate market is anticipated to reach USD 603.4 billion by 2033, with a CAGR of 9% from 2025 to 2033.

• Commercial Sector: From 2025 to 2034, the commercial real estate market is projected to grow at a CAGR of 21.6%. Valued at USD 74.80 billion in 2024, it is expected to increase from USD 90.96 billion in 2025 to USD 528.84 billion by 2034.

• Urbanization, government initiatives, and technological advancements are set to fuel real estate growth. By 2030, 38% of India’s population is projected to live in urban areas, driving higher demand for both residential and commercial properties.

And as the real estate market grows, so does the infrastructure around it. Let’s explore the key developments happening across the country.

Infrastructure Development in India 

India’s rapid infrastructure growth is a key driver of real estate demand. Significant investments in urban infrastructure, transportation networks, and utilities are enhancing connectivity and accessibility, creating high-growth opportunities for both residential and commercial real estate.

• Infrastructure Growth Numbers: The India Infrastructure Sector Market size is expected to reach USD 223.59 billion in 2025 and grow at a CAGR of 9.57% to reach USD 353.11 billion by 2030.

• Urbanisation: The ongoing urbanisation and infrastructure projects are fuelling demand for new properties.

• Transportation Projects: New metro systems, expressways, and improved airport infrastructure are improving accessibility driving property values upward.

One aspect of infrastructure growth that’s seeing a big impact is tourism and corporate travel. Here’s how it’s affecting rental demand.

Surge in Domestic Tourism and Corporate Travel

India’s tourism and corporate travel sectors are expanding, influencing the demand for short-term and long-term rental properties. India saw a notable increase in domestic tourism in 2023, with 2,509.63 million Domestic Tourist Visits (DTVs), up from 1,731.01 million in 2022. This growth drives higher demand for tourism-related real estate, including hotels, resorts, and vacation homes.

• Tourism Growth: Domestic tourism has grown steadily, increasing demand for short-term rentals and vacation homes.

• Business Travel: Corporate activities are seeing a strong resurgence, boosting demand for business accommodation and temporary office spaces.

• India's investment in tourism infrastructure has reached around $1 billion (Rs. 7,000 Crores), improving connectivity and amenities, which drives up real estate values in popular tourist areas and emerging destinations.

• Tier 2 and Tier 3 cities are becoming key destinations for both domestic tourism and corporate travel, driven by government initiatives like the development of 50 new airports and 100 railway stations, which are fueling real estate growth in these areas.

As tourism and corporate travel rise, the demand for office spaces is also booming. Let's dive into how office spaces are contributing to the overall growth of the market.

Expansion of the Office Space Segment

The office real estate market in India is evolving due to shifting work patterns, such as hybrid models. As businesses look for flexible and collaborative workspaces, there’s a growing demand for modern office environments.

• India's office real estate market is forecasted to grow from an estimated USD 42.93 billion in 2025 to USD 150.42 billion by 2030, with a compound annual growth rate (CAGR) of 28.5%.

• The absorption rate for office space in India’s major cities is rising by over 8% annually, driven by the expansion of the IT and service sectors.

• In 2024, India’s office sector achieved a record-breaking gross leasing volume (GLV) of 89 million square feet (MSF), reflecting a 19% increase from 2023 and marking the highest leasing activity in the top 8 cities.

• The growing startup culture and a shift towards remote work drive the demand for coworking spaces, offering affordable, flexible office solutions.

• In the first half of 2024, Bengaluru’s office space transactions over 100,000 sq. ft surged 54% year-on-year, reaching 15.69 MSF compared to 10.18 MSF in H1 2023.

• The top six Indian cities are expected to witness gross leasing volumes of 65-70 MSF in 2025, with Bengaluru alone projected to contribute about one-third of this demand.

Next, the "Real Estate @2047" report paints a picture of the direction of the industry in the coming decades.

“Real Estate @2047” Report by CREDAI and EY

According to the “Real Estate @2047” report by CREDAI and EY, the Indian real estate market is poised to see tremendous growth in the coming decades, with urbanisation, infrastructure development, and government support fueling this expansion.

• Market Projection: India’s real estate market is set to reach $4.8 trillion by 2047, contributing 18% to gross domestic product.

• Employment Opportunities: The sector's growth will create millions of jobs, further boosting the economy and supporting a broad range of industries.

• The PropTech segment within real estate is forecasted to expand significantly from $10.5 billion (less than 5% of the market) to $600 billion by 2047, approximately 12-13% of the overall market.

• The real estate sector employs over 77 million people, accounting for about 14-15% of India’s workforce, and is a key pillar of the economy.

• Urbanization is expected to reach 50% by 2047, and about 1 billion people will enter the middle class, driving demand for residential and commercial real estate.

Finally, it’s important to consider the role of government initiatives, like PMAY, in shaping the future of affordable housing and the rental market.

Government Initiatives like Pradhan Mantri Awas Yojana (PMAY)

Government initiatives like PMAY are playing a crucial role in providing affordable housing to millions of Indians, creating an attractive investment opportunity in the affordable housing sector.

• The PMAY scheme aimed to provide affordable housing to 2 crores (20 million) low and moderate-income families by March 31, 2022, with two main components: PMAY-Urban (PMAY-U) and PMAY-Gramin (PMAY-G) for urban and rural poor, respectively.

• As of early 2025, over 1 crore houses have been sanctioned under PMAY-U, with around 88 lakh houses delivered to beneficiaries so far.

• The PMAY-U 2.0 phase targets financial assistance to 1 crore urban poor and middle-class families.

• PMAY offers interest subsidies on home loans for economically weaker sections, stimulating demand for affordable housing.

What Tenants Can Do:

• Look into government-subsidized housing options, such as PMAY, that offer low-interest loans and financial assistance, making homeownership more attainable for eligible tenants.

• Keep an eye on government-backed infrastructure developments, such as new roads, metro lines, or public facilities, as these can boost property values and make nearby rental options more attractive in the long term.

• With the growth of affordable housing initiatives, more developers might offer rent-to-own schemes. Explore opportunities that allow you to rent a property with the option of buying it later, especially under schemes like PMAY.

• Follow government announcements regarding changes to housing schemes, taxes, or subsidies, as these can directly affect rental prices and availability, especially in rapidly developing areas.

Conclusion

The Indian rental market is evolving at an unprecedented pace in 2025, driven by increasing rent prices, shifting tenant preferences, and the growing influence of technology on the rental process. These changes create challenges and opportunities for tenants adapting to a more competitive and tech-driven market. 

As demand for rental properties increases, tenants should start their search early, embrace digital tools for convenience, and prioritize properties with desirable amenities such as smart home features and reliable internet. Understanding the impact of government schemes like PMAY can help tenants make more informed decisions about their housing options.

Crib