By Dr Sanjay Chaturvedi, LLB, PhD,
Twitter : Sanjachat
Residential Rentals are declining after the #Coronavirus making it worst as cash flow stopped in the economy. Rentals are becoming un-affordable. Whopping high rentals touched peaked as the capital rates for properties gone out of reach. Now even during the lockdown, people have been giving notices to landlords for leaving the rental premises as the current rates of rentals are not affordable. People are trying to search lesser costly rental accommodation even in locality where they wouldn’t have preferred to live.
Landlords have started offering lower rentals or moratorium period for tenants as they fear that at this rate they may not get tenant plus cost of brokerage and loss of vacant premises for months may give them loss in rentals. Searching of rental premises have increased. People are most likely to shift to smaller dimensions and smaller spaces.
Home loan borrowers too are looking for restructuring their debts as they may service it aftermath of #Coronavirus fearing a big recession in the economy. Housing finance companies are gearing up for biggest piling of NPA stock in coming months. Many banks have started giving moratorium period for all EMI due between 1st March 2020 till May 2020. As RBI had already instructed banks to not force borrowers to pay EMI, interest etc. banks have already given the moratorium period to pay EMI and interest on Over Drafts.
Crashed in Rental market is not a good news to real estate market either. Since prospective buyers, those who are sitting on fence as to buy or lease, now going to prefer to lease as Rentals are lesser than EMI cost.
The fall is estimated to 2001 rental levels by deducing almost 70% fall in rental incomes. Mostly the fall is expected in metros and metropolitan cities. World over the trend is expected since #Coronavirus has affected every economy on this earth.