Chennai Leads with Sharpest Rent Increase in India's Major Cities
In the latest rental update by Magicbricks, Chennai has recorded the highest quarter-on-quarter (QoQ) rent increase of 22.2%, while Mumbai continues to be the most expensive rental market.
Chennai Rent IncreaseRental MarketMagicbricksIndian CitiesProperty PricesReal Estate NewsNov 18, 2024
Chennai's Remarkable Rent Surge
Chennai has witnessed the sharpest increase in rental prices, with a 22.2% QoQ jump. The average rent in Chennai moved from INR 17.94 psf in Q2 2024 to INR 26.91 psf in Q3 2024. This surge is attributed to a robust increase in demand, which has outpaced the supply of rental properties.
Other Cities with Notable Increases
Delhi and Thane also experienced significant rent hikes. Delhi saw an 11.4% QoQ increase, with average rents rising to INR 37.55 psf. Thane recorded a 10.9% QoQ increase, pushing rents to INR 33.10 psf.
Top Rental Markets
Mumbai continues to be the priciest rental market at INR 86.50 psf per month, followed by Delhi at INR 37.55 psf and Navi Mumbai at INR 33.83 psf. In contrast, developing markets like Greater Noida (INR 15.48 psf), Noida (INR 21.32 psf), and Kolkata (INR 22.14 psf) offer more affordable rental options.
Demand and Supply Imbalance
The rental demand has continued to grow, albeit at a slower pace of close to 2% QoQ, following a notable 14.8% increase in the previous quarter (April to June 2024). However, the supply of rental properties has not kept up, declining by 6.7% QoQ in the third quarter. This imbalance has led to upward pressure on rental prices.
Rental Yields
Gross rental yields across the 13 cities reached 3.62%. Ahmedabad led the pack with the highest yield at 3.9%, followed by Hyderabad, Kolkata, and Pune, each recording 3.7%. Chennai saw the largest QoQ yield growth at 21.3%, with Delhi, Hyderabad, and Navi Mumbai also reporting strong increases at 8.8%, 5.4%, and 5.3%, respectively. However, Greater Noida, Gurugram, Kolkata, Mumbai, Noida, and Pune saw declines as property price growth outpaced rental rate growth.
Conclusion
The rental market dynamics in India are clearly indicating a strong demand for rental properties, particularly in major cities like Chennai, Delhi, and Thane. The supply shortage is exacerbating the rent increase, and it remains to be seen how the market will evolve in the coming quarters. For now, renters in these cities can expect to pay more for their living spaces.
Frequently Asked Questions
Which city recorded the sharpest rent increase in the third quarter of 2024?
Chennai recorded the sharpest rent increase in the third quarter of 2024, with a 22.2% QoQ increase.
What is the current average rent in Mumbai?
The current average rent in Mumbai is INR 86.50 psf per month, making it the priciest rental market in India.
Why have rental prices increased in major Indian cities?
Rental prices have increased in major Indian cities due to a strong demand for rental properties that has outpaced the supply of available rental units.
What is the gross rental yield in Ahmedabad?
The gross rental yield in Ahmedabad is 3.9%, the highest among the 13 cities analyzed in the Magicbricks report.
How much did the rental demand increase in the third quarter of 2024?
The rental demand increased by close to 2% QoQ in the third quarter of 2024, following a significant 14.8% increase in the previous quarter.
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