Residential rental prices increased in all seven of the top cities, according to a survey by real estate consultancy ANAROCK, which revealed a massive 8% increase in rent in Bengaluru's premium regions in the first quarter of 2024.
With a rental yield of 4.45% in Q1 2024, IT-heavy Bengaluru is not the only city seeing this trend; other cities have not experienced an increase on par with Bengaluru's.
Residential rentals increased by an average of 4 to 9 percent between Q1 2024 in the chosen neighborhoods of the top seven cities. The 4–9% spike in Q1 2024 is highly noteworthy, especially because the average yearly growth is just 5–10%. This is definitely good news for landlords.
In the first quarter of 2024, the average rent in Noida's Sector 150 increased by 9%, while in Delhi's Dwarka, it increased by 6%. The rental rates in Mulund and Chembur, Mumbai, increased by 4% apiece. The average monthly rental rates in Chembur were around Rs 62,500 in Q1 2024 compared to Rs 60,000 in Q4 2023.
The Rajarhat neighborhood of Kolkata saw the least amount of rent growth, rising by only 3% from around Rs18,500 per month in Q42023 to roughly Rs19,000 per month in Q12024. In both Chennai and Mumbai, rentals grew by a more moderate 4 percent while in Hyderabad, key neighborhoods like HITECH City and Gachibowli saw rents jump by 5 percent apiece in the quarter.
“Going by the current momentum, there are no immediate prospects of the rental inflation trend slowing down...It is expected to pick up in the next few quarters, as rental activity typically remains high in the first two quarters of as fiscal year.Residential rental yields in India had chronically stagnated before the Covid-19 pandemic,with the national average at just 3 percent for many years," says Santhosh Kumar, Vice Chairman–ANAROCK Group.
"Rent yields are also rising as a result of the post-pandemic surge in rental demand following the reopening of workplaces. The rental values and yields of IT-dominated cities like Bengaluru, Gurugram, Pune, Noida, and MMR have significantly increased,” according to Kumar.
Since the epidemic, residential rental values in India's most desirable cities have increased dramatically; in 2023, they will rise by more than 30% year over year. The survey stated that while renting activity typically declines in the last quarter of the year, rental values stabilized in most cities in the last quarter of 2023. However, this tendency witnessed a reverse in 2024.
Rental Profits
Pre-Covid 2019, Bengaluru's rental yield was 3.6 percent, indicating a 24 percent increase throughout this time. The average rental values in Whitefield and Sarjapur Road increased by 8% apiece in Q1 2024 compared to the prior quarter, according to ANAROCK statistics. For a typical two-bedroom apartment of 1,000 square feet on Sarjapur Road, the average monthly rent in Q4 2023 was around Rs 31,600; in Q1 2024, that amount increased to roughly Rs 34,000.
In a similar vein, Whitefield had an 8% increase in average monthly rent, from Rs 30,200 in Q4 2023 to Rs 32,500 in Q1 2024. The rental values in Bengaluru's most desirable areas increased by 40% between the end of 2022 and Q12024. Mumbai is the second most popular city after Bengaluru, with a rental yield that increased by 19% from 3.5 percent in 2019 to 4.15 percent in Q1 2024. Gurugram is not far behind, having increased its rental yield from 3.5% in 2019 to 4.1% in the most recent quarter.
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