Urban Indians Renting Longer As High Home Prices Delay Ownership Plans

Renting for urban Indians was primarily viewed as a step before buying their own place, but high prices as well as job and lifestyle shifts are pushing them to rent for longer durations and delaying their home purchases. While the aspiration to own a house remains strong, people are opting to rent for longer periods as their lifestyles and financial priorities change.

Industry experts say renting is increasingly being looked at as a long-term housing option rather than just a stop-gap arrangement before homeownership, and it will eventually co-exist with buying rather than replacing it. 

“We are seeing the emergence of a more sophisticated rental market led by a lifecycle where tenure decisions will be dependent on mobility needs, affordability and consumption,” says Anshuman Magazine, chairman and CEO – India, South-East Asia, Middle East and Africa, CBRE.

This is further supported by the structural changes in the Indian economy. A younger and highly mobile workforce, coupled with a sustained employment growth across key cities is driving demand for flexible housing options. “Besides, the continued stability in the residential capital values, especially across core markets has made renting a more capital-efficient entry point for a large part of the population,” says Magazine.

While rental values have gone up, they continue to remain more adaptable as compared to ownership costs. Importantly, the rental housing ecosystem itself is undergoing a phase of institutionalisation. The emergence of other forms of housing, such as managed rental housing, co-living, and professionally operated residences, is introducing more transparency, and quality of service. This is an important shift from a fragmented market towards a more organised and investable asset class.

“This is also significant from the perspective of capital markets. Regulations like the Model Tenancy Act, 2021 are likely to improve transparency and improve investor confidence significantly. We expect this to be instrumental in unlocking a greater institutional participation and scaling formal rental platforms across India,” says Magazine.

Nevertheless, the ownership market continues to remain strong. India’s residential market is resilient, with both sales and new launches crossing 270,000 units in 2025. The high-end segment has been a key growth driver, highlighting a shift towards quality-led demand and stronger confidence among the end-users.

“Home ownership continues to be significant culturally and financially, and is often seen as a vehicle for long-term wealth generation. It is getting increasingly evident that this is a shift in timing rather than intent. Today, more buyers are adopting a ‘rent early, own later’ approach while opting for rental housing during more mobile life stages while deferring ownership decisions,” says Magazine.

Going forward, renting is likely to see a sustained mainstream adoption across leading urban cities, mainly those characterised by high employment growth and elevated housing prices. In the medium term, the housing market is likely to evolve into a more balanced and flexible system, where renting and ownership coexist as complementary components of an increasingly institutionalised residential ecosystem.