To boost affordable housing in urban India, the Union budget earlier this year proposed a new model tenancy law - an attempt to handle the currently fragmented rental housing market.

It begs the question: how pricey is India’s urban rental market today, and how does affordability vary across major cities? A Mint analysis of rental housing data across India’s top six metros (Delhi, Mumbai, Kolkata, Chennai, Hyderabad and Bengaluru) shows that Hyderabad has the cheapest rents on average ( 11,000) and Mumbai has the most expensive rents ( 38,200). These values are for a 650 sqft apartment, the rough size of a one bedroom-hall-kitchen (BHK) apartment.

For this analysis, we considered over 70,000 rental listings from 99acres.com, a real estate portal. Only rental values within the municipal limits of the six largest metros in India (for which data was available) have been considered here. The average rent per sqft across city wards was used to derive the rental values of a 650 sqft apartment in each ward.

Because of the nature of online listings, this analysis excludes data from neighbourhoods with largely informal rental markets such as the Old City in Hyderabad and wards with very few property listings (those with less than 5 listings).

Unsurprisingly, across the six cities, the central parts are the most expensive, and the cheapest rents are in areas farthest from the city centres. Mumbai on account of its unique geography and broken property market has rental listings that are far more expensive compared to the other metros.

The most expensive wards across the six cities are all in Mumbai --- the A ward ( 76,500 for a 650 sqft apartment), D ward (Rs. 73,400) and the E ward (Rs. 64,000). The 10 cheapest wards across cities are all in Hyderabad.

Unsurprisingly, across the six cities, the central parts are the most expensive.
Unsurprisingly, across the six cities, the central parts are the most expensive.
The most expensive wards across the six cities are all in Mumbai.
The most expensive wards across the six cities are all in Mumbai.
Across cities, rents seem to eat into a large share of urban incomes.
Across cities, rents seem to eat into a large share of urban incomes.

An overwhelming majority (85%) of wards across cities barring Mumbai have an average rental value of 20,000 or less. In contrast, in Mumbai, the least expensive ward (the R North ward) itself has an average rent of 21,400. The median rent for a 650 sqft apartment across the five cities (barring Mumbai) is 14,500 while the same for a 650 sqft apartment in Mumbai is 41,800.

The average rent across the six metro cities at  <span class='webrupee'>₹</span>15,600 accounts for roughly half of average incomes.
The average rent across the six metro cities at 15,600 accounts for roughly half of average incomes.
Hyderabad has the cheapest rents on average.
Hyderabad has the cheapest rents on average.
Hyderabad and Bengaluru saw greater rise in the share of tenants.
Hyderabad and Bengaluru saw greater rise in the share of tenants.

Across cities, rents seem to eat into a large share of urban incomes. Data from the Household Survey on India’s Citizen Environment & Consumer Economy (ICE 360° survey), covering 61,000 households across India in 2016 showed that the average household in a metro earned 29,690 in 2016, or 31,800 at 2019 prices. The average rent across the six metro cities at 15,600 accounts for roughly half of average incomes. These statistics suggest that an affordable apartment to rent is a huge challenge for an average city-dweller.

One reason why this has not become a major political issue yet is that tenants are still a minority across India’s largest cities. Across Delhi (including all districts of the city), Mumbai (including Mumbai and Mumbai Suburban districts), Kolkata, Chennai, Hyderabad and Bengaluru, 60% of residents live on properties they own, according to the 2011 census.

Yet, the proportion of tenants is growing as new migrants stream into the biggest cities. The proportion of renters in the six largest cities has gone up by 2 percentage points over the past decade. Hyderabad and Bengaluru which also saw the greatest inflow of migrants over the past decade also saw greater rise in the share of tenants.

To be sure, some of the migrants could also become home-owners over the next few years but with property prices remaining steady despite a real estate slump, home-ownership may be a distant dream for many city dwellers.

It remains to be seen how the new tenancy regulations are framed, and how far they help transform the urban rental market in the country.

This is the fifth of a ten-part data journalism series on life in Indian cities

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