Online Home Rental Market Is Estimated To Witness High Growth Owing To Increasing Living Expenses

  • Ronak Shah
  • U.S.A
  • January 14, 2025

Image Credit, Muhammad Abubakar

The Online Home Rental Market is estimated to be valued at US$ 20.58 Bn in 2024 and is expected to exhibit a CAGR of 13.1% over the forecast period 2024-2031, as highlighted in a new report published by Coherent Market Insights.

The online home rental market is driven by the increasing living expenses and high property prices. Living expenses have increased substantially over the past few years due to rising inflation. At the same time, property prices have also surged in most cities globally. This makes it difficult for many to own a home. As a result, people are increasingly opting for rental homes. Furthermore, high occupancy rates in the rental sector have encouraged more property owners to list their spaces on online rental platforms, thereby fuelling market growth.

Key Market Trends: Emergence of technology-driven property management – The integration of technologies like IoT, AI, and machine learning into property management services has emerged as a key trend. It allows for automated lease registration, digital documentation of property details, and remote monitoring of homes.

Rise of short-term rentals – On-demand, short-term, and flexible rentals for periods of less than 30 days have gained immense popularity. Several property owners offer their spaces on a daily, weekly or monthly basis to leverage high occupancy rates and lucrative pricing in the short-term rental market.

Market Opportunities: By Property Type Insights – The apartments segment dominated the market in 2019 with a revenue share of over 45%. Increasing migration of workforce for jobs opportunities is leading to rise in demand for apartments on rent. Apartments offer flexibility for tenants looking for accommodation for short duration. Availability of fully furnished apartments on monthly, quarterly or annual basis makes it a preferred choice.

The mid-range price segment accounted for highest share in 2019. Homes priced between $1,000- $2,000 per month attracted large tenant base. This price range offers value for money along with sufficient space and amenities. Further, tenants looking for rental homes near commercial areas prefer mid-range pricing.

Key Market Takeaways: Online Home Rental Market is anticipated to witness a CAGR of 13.1% during the forecast period 2024-2031, owing to emergence of global sharing economy and rapid urbanization. On the basis of property type, apartments segment is expected to hold a dominant position, owing to flexibility offered to tenants and short rental durations.

By price range, mid-range priced homes between $1,000- $2,000 per month are most popular among tenants seeking value for money. On the basis of region, North America is expected to hold a dominant position over the forecast period, due to high mobility of workforce and dominance of online rental platforms.

Competitor Insights:

 

Recent Developments in Online Home Rental Market

By early 2024, Vacasa owned over 30,000 homes across major U.S cities and beach/ski destinations. They focused on large multi-bedroom and multi-unit properties tailored for families and groups. All bookings, cleaning and maintenance were handled internally through the Vacasa platform. This allowed them to offer consistent high-quality service compared to individual hosts.

In June 2023, Airbnb announced strategic partnerships with major Asia-based online travel agencies like Booking.com, Expedia and MakeMyTrip to market and list its home rental inventory alongside hotels. This will further fuel Airbnb bookings from Asia which grew over 30% in the past six months. Likewise, VRBO also onboarded travel portals Trip.com and TripAdvisor to tap into their large customer bases, offering additional booking touchpoints. Such third-party channel partnerships are becoming key marketing drivers. You can know more about this in the full-report copy.

 

Summary

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