Housing Rental Growth Slows Down in Top Cities as Supply Increases
The average rental hike was at 2-4% in Q2 2024 compared to 4-9% in Q1 2024; Bengaluru's Whitefield and Noida's Sector 150 saw the highest rental growth at 4%
Real EstateHousing RentalAnarockDelhi NcrMumbaiBengaluruHyderabadReal Estate MumbaiJun 18, 2024
Real estate consultant Anarock said that the growth in housing rents across the top seven cities - Delhi-NCR, Mumbai Metropolitan Region (MMR), Chennai, Kolkata, Pune, Hyderabad, and Bengaluru - has moderated because of improvement in housing supply.
With more new supply entering the markets, a highly speculative residential rental spike is coming to a halt. Anarock data indicates that approximately 5,31,470 units are expected to be completed in 2024 across the top 7 cities, provided there are no delivery delays.
Bengaluru's Whitefield and Noida's Sector 150 witnessed the highest 4% quarterly rental growth each in Q2 2024 against the preceding quarter. MMR is expected to see approximately 1.61 lakh units completed in 2024 and 1.44 lakh units in NCR.
In India, the second quarter of most years typically sees rents increase more than in other quarters due to the commencement of the new academic year and the employment of new staff. This year, declining rental value growth coincides with substantial new housing supply entering these markets.
The top 7 cities are set to deliver approximately 5.31 lakh new units in 2024 while in 2023, these cities saw approximately 4.35 lakh units hit their markets. This denotes a 22% annual supply increase this year if delivery schedules remain on track.
Bengaluru rentals and supply Average rents for a standard 1,000 sq.ft. 2 BHK in Bengaluru's Whitefield rose by 4% – from ₹32,500 per month in Q1 2024 to ₹35,000 per month in Q2 2024 to date. In Q1 2024, the quarterly jump against Q4 2023 was double at 8%. Bengaluru, the key rental hub with the highest rental value hikes, will see approximately 51,685 units delivered in 2024, against approximately 52,565 units in 2023.
Rents in Hyderabad and housing supply Hyderabad's HITECH City and Gachibowli saw average rents rising by 3% each in April-June 2024 to date over the preceding quarter. In January-March 2024, the quarterly average rent hike in both these markets was 5%. Hyderabad is slated to see approximately 34,770 units completed 2024-end; in 2023, approximately 20,500 units were completed.
MMR rentals and supply Average housing rent in MMR's key markets Chembur and Mulund rose by just 2% against the preceding quarter (Q1 2024). In January-March 2024, it rose by over 4% against Q4 2023. Among the top 7 cities, MMR is slated to see the highest completions at approximately 1,60,900 units in 2024. In 2023, the region saw approximately 1,43,500 units completed.
Frequently Asked Questions
What is the average rental hike in Q2 2024 compared to Q1 2024?
The average rental hike was at 2-4% in Q2 2024 compared to 4-9% in Q1 2024.
Which cities witnessed the highest rental growth in Q2 2024?
Bengaluru's Whitefield and Noida's Sector 150 witnessed the highest 4% quarterly rental growth each in Q2 2024 against the preceding quarter.
How many units are expected to be completed in 2024 across the top 7 cities?
Approximately 5,31,470 units are expected to be completed in 2024 across the top 7 cities, provided there are no delivery delays.
What is the annual supply increase this year if delivery schedules remain on track?
This denotes a 22% annual supply increase this year if delivery schedules remain on track.
Which city is expected to see the highest completions in 2024?
MMR is expected to see the highest completions at approximately 1,60,900 units in 2024.
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