In a significant shift within India’s real estate, the initial three quarters of 2023 witnessed a substantial rise of over 30% in housing rents across the top seven cities. This surge was particularly led by IT/ITeS hubs such as Bengaluru, Hyderabad, and Pune, according to ANAROCK Research data.
Bengaluru took the forefront in this rental surge, often dubbed the Silicon Valley of India. Notable areas experienced an impressive 31% growth in residential rents for standard 2BHK flats covering approximately 1,000 sq. ft. Whitefield, a key locality in Bengaluru, notably saw a significant increase in the average monthly rent for such homes. It rose from Rs 24,600 per month at the end of 2022 to Rs 28,500 per month by September-end 2023—a robust 16% surge in nine months.
Following Bengaluru closely, Hyderabad experienced the second-highest rental value growth, with key markets in the city witnessing up to a 24% increase. HITECH City, a pivotal area in Hyderabad, observed average rents rising from Rs 24,600 per month at the close of 2022 to Rs 28,500 per month by the end of Q3 2023—a significant 16% rise in rental values over the nine-month period.
Gachibowli, another significant micro-market in Hyderabad, recorded an impressive 24% surge in rents during the same period. The average rents in this locality escalated from Rs 23,400 per month at the end of 2022 to Rs 29,000 per month by September-end 2023.
Pune, emerging as a real estate hub, displayed commendable resilience in the face of evolving rental dynamics. The Hinjewadi micro-market in Pune recorded a rental value growth of 17% in the first nine months of 2023. Notably, the average rents in this locality increased from Rs 21,000 per month at the close of 2022 to Rs 24,500 per month by September-end 2023. Additionally, Wagholi, another key area in Pune, witnessed an 18% surge in rents during the same period.
Anuj Puri, Chairman of ANAROCK Group, provided insights, stating, “However, we may now see rental values begin to stabilize in most cities in the ongoing quarter as renting usually remains low in the last quarter of the year. Rents will once again build up steam when renting picks up in the January to March period.”
In the National Capital Region (NCR), the top three markets showcasing rental value growth were Sohna Road in Gurugram (11% increase), Sector-150 in Noida (13% growth), and Dwarka in Delhi (14% growth). Moving to the Mumbai Metropolitan Region (MMR), Chembur and Mulund emerged as the top two markets with rental value increases of 14% and 9%, respectively.
Kolkata, not to be left behind, exhibited notable growth in EM Bypass and Rajarhat, registering 14% and 9% increases in rental values, respectively.
Among the top seven cities, Bengaluru boasts the highest rental yield, standing at an impressive 4.35% as of September 2023-end. Mumbai follows closely with a substantial rental yield of 4.05%, reaffirming the robustness of these real estate markets.
So, the surge in residential rentals in India’s top cities reflects a dynamic and evolving real estate landscape. The data presented here serves as a comprehensive snapshot of the growth dynamics, offering valuable insights for industry professionals and stakeholders navigating the intricacies of the housing market. Subscribe to our newsletter for the latest insights and analysis, and navigate the ever-changing realm of real estate with confidence.
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