India’s real estate story is usually told through glossy brochures and shiny new towers. But the real engine of housing in this country often lives far away from formal builders and regulated projects. Behind the official skyline is a parallel world of student hostels, PGs, short-term rentals, unplanned colonies, and informal rental chains. These systems run on trust, improvisation, and everyday hustle, serving millions who can’t afford or don’t want the rigidity of formal housing. They may not show up in government reports, but they shape how people study, work, migrate, and settle in cities. They are messy, vibrant, and completely essential.
- Student Hostels: The Invisible Campus Economy
In education hubs like Kota, Pune, Manipal, and Vellore, hostels run by small landlords fill a huge gap. These aren’t branded student housing facilities. They’re simple lodgings tucked behind coaching centres and universities. Rooms are often small and basic, but they sit at the heart of a wider student life: chai breaks in common kitchens, last-minute revision sessions, and friendships built under pressure.
For landlords, the constant flow of students means steady income. For students, these hostels offer something they desperately need—affordable rooms close to their classes. Around these clusters, an entire economy grows. Photocopy shops, mess caterers, stationery stalls, and tea vendors survive almost entirely on student footfall. It’s a housing market built from necessity, not regulation, and it runs with surprising efficiency. - Paying Guest Networks: Trust Over Contracts
In areas like Bengaluru’s Koramangala, Delhi’s Satya Niketan, or Gurugram’s residential sectors, PG accommodation has become a lifeline for young professionals. Instead of formal agreements or structured leases, PGs rely heavily on word of mouth. A landlord might put the rules on a handwritten sheet, meals are fixed over WhatsApp, and rent is often paid in cash.
But PGs aren’t just places to sleep. They’re social ecosystems. Flatmates share everything—wifi passwords, late-night food orders, office frustration, and big-city survival tips. Many women moving to metros for the first time feel safer in PG setups where other residents look out for one another. For landlords, the demand is constant and the returns generous. For tenants, the flexibility and affordability often beat any formal rental option. - Airbnb Empires: The Digital Shadow Market
Short-term rentals have created a new kind of property ecosystem in tourist-heavy and tech-driven cities. In Goa, Jaipur, Bengaluru, or Lonavala, entire homes and apartments are listed as weekend stays. Families turn spare rooms into guest spaces, and small investors convert flats into boutique Airbnb-style homes.
This digital rental economy comes with its own ripple effects. Local landlords earn far more than they would from a long-term tenant. Cafés, bike rentals, laundry services, and tour operators thrive on the constant movement of visitors. At the same time, neighbourhood rents shoot up, and long-term residents find themselves pushed to the outskirts. It’s a thriving, fluid market, but one operating mostly outside traditional regulation. - Illegal Colonies: The Unspoken Urban Reality
Across the edges of Delhi, Jaipur, Hyderabad, and Bhopal, large swathes of housing exist without formal approval. These colonies grow because they are affordable and accessible for families who can’t enter the formal market. Roads might be unfinished, power might come from generators, and water from tankers, yet these areas house millions.
What they lack in planning, they make up in community. Festivals spill into the lanes, children play in open plots, and neighbours rely on one another to navigate daily challenges. Though technically unauthorized, these colonies become deeply rooted. Politicians know they hold voter power, so enforcement often looks the other way. These neighbourhoods are a reminder that affordability often decides where people live, not legality. - Informal Rental Chains: The Everyday Housing Lifeline
In Mumbai’s chawls, Kolkata’s bustees, and Ahmedabad’s slum settlements, housing is run by small landlords or local intermediaries who handle everything from rent collection to repairs. Rooms are cramped, ventilation is limited, but these places allow families to live close to their workplaces at a cost they can afford.
Despite the hardships, these areas are full of life. Neighbours share kitchens, help with childcare, and celebrate festivals in shared courtyards. These rental chains exist because formal housing doesn’t keep up with India’s rising urban population. They are imperfect, yet they keep cities functioning.
These five markets reveal the real truth about Indian housing: people build their own solutions when the formal system can’t keep up. They may not fit neatly into city plans, but they reflect the way India grows, improvised, people-driven, and full of resilience.
