Co-living and Rental Market in India: Beds, Market Size, Housing Shortage and Rents (2026)

How big is the co-living market in India?

Colliers estimates organised co-living inventory at about 0.3 million beds in 2025, against a demand base of 6.6 million beds drawn from roughly 50 million urban migrants aged 20 to 34. That is a penetration rate of about 5%. Colliers expects inventory to more than triple to close to 1 million beds by 2030 and penetration to rise above 10%.

In money terms Colliers sizes the co-living market at around INR 40 billion (about ₹4,000 crore) in 2025, with the potential to grow over five times to close to INR 200 billion (about ₹20,000 crore) by 2030. Leading operators have raised about $1 billion since 2015, and Colliers says institutional returns are closer to 10%, against 2 to 5% yields on traditional residential assets.

Entrackr's funding data shows co-living startups such as Stanza Living, Amber and Colive raised about $224 million between 2020 and 2025, far less than co-working or hospitality. Other research houses publish different market values; the bed counts are more consistent across reports than the rupee or dollar figures.

Is co-living cheaper than renting a flat?

Often, yes, for a single person. Colliers compared single occupancy co-living rents with traditional 1 BHK rents in the same localities in April 2025 and found a rental arbitrage of up to 35%, with a typical range of 20 to 35%. Its 1 BHK figures include utilities and maintenance; co-living rents usually include furnishing, housekeeping, utilities and shared amenities.

The trade-off is space and privacy. For a young professional moving to Gurgaon for a job in Cyber City or on Golf Course Road, co-living makes sense for the first year or two. For a couple or anyone staying longer, a 1 or 2 BHK usually works out better once you factor in furniture you already own.

Should a Gurgaon landlord lease a building to a co-living operator?

Colliers describes three business models. In the lease model, which most operators prefer, the operator leases flats or whole buildings from owners and rents beds to residents; typical leases run 3 to 9 years. In the management or revenue sharing model the owner takes a share of monthly or annual revenue, so both sides carry occupancy risk. In the franchise model the owner runs the property under the operator's brand and pays a fee.

The numbers explain the appeal. Colliers says institutional co-living returns are closer to 10%, against 2 to 5% for traditional residential assets, and Anarock puts Gurugram's average residential rental yield at 4.3% in Q2 2026. Our view: a fixed lease of 3 to 9 years with a listed or well funded operator suits an owner of an older builder floor or small building near Cyber City or Sohna Road. A revenue share only makes sense if you are comfortable carrying vacancy risk yourself.

Check the lock-in, the rent escalation clause and who pays for wear and tear before you sign. Co-living residents turn over far faster than a family tenant.

How large is the student housing gap?

Student housing is the fastest growing slice of co-living. Colliers cites AISHE data showing higher education enrolment rose from 30.2 million in FY2012-13 to 43.3 million in FY2021-22. In FY2021-22, colleges and universities could house about 4 million students, which Colliers describes as only 35 to 40% of demand.

Colliers estimates student accommodation demand at about 12 million in 2025. About 11% of India's population is in the 18 to 23 age group, and the national gross enrolment ratio was 28.4% in 2021-22, so the numbers will keep rising as enrolment grows.

What is India's rental and urban housing shortage?

The latest official national estimate is old. The Technical Group on Urban Housing Shortage (TG-12), set up by the Ministry of Housing and Urban Poverty Alleviation, estimated a shortage of 18.78 million households in urban India as of 2012. Congestion, families sharing a home that should be split, made up about 14.99 million of that.

During 2012, about three quarters of the shortage was in the economically weaker section (monthly income up to ₹5,000) and the remaining quarter in the lower income group. The same MoSPI chapter flags the paradox of a large and growing stock of vacant houses in urban India alongside this shortage. No newer official national estimate has been published, so treat 18.78 million as a 2012 figure, not a current one.

This mismatch is the core argument for rental housing: vacant flats exist, but owners do not trust the tenancy system enough to let them, and the people who need homes cannot buy them.

Which states have adopted the Model Tenancy Act?

Very few. The Model Tenancy Act is a template from the Centre, and because tenancy is a state subject each state has to pass its own law. According to a Rajya Sabha reply in August 2025, reported by the Free Press Journal in March 2026, Assam, Arunachal Pradesh, Andaman and Nicobar Islands, Dadra and Nagar Haveli and Daman and Diu, and Lakshadweep have adopted tenancy laws as per the Model Tenancy Act.

Andhra Pradesh, Tamil Nadu, Uttarakhand and Uttar Pradesh had already notified tenancy acts based on an earlier draft and were asked to align them with the final version. Haryana is not on either list, so rentals in Gurgaon are still governed by Haryana's existing law and the terms of your rent agreement. Register the agreement and keep the deposit receipt.

Rental growth and yields by city

Rental yields have risen in every major city since 2019 as rents caught up with prices. Anarock data for 2019 to Q2 2026 shows Gurugram's average residential yield up from 3.5% to 4.3% while capital values rose 117% from ₹6,150 to ₹13,350 per sq ft. Bengaluru has the highest yield of the six cities shown at 4.6%, and Delhi the lowest at 3.2%.

In NCR, rent growth has now flattened. Anarock's Q2 2026 data shows the average quoted rent for a 2 BHK on Dwarka Expressway at ₹25,500 to ₹37,000 a month, up 1% in the quarter, and New Gurugram at ₹22,000 to ₹35,000, flat on the quarter. For sector level rents, yields and the full trend since 2021, see our Gurgaon rent statistics page.