India's Top Cities Witness Sustained Growth in Rental Yields in Q2 2024
The residential real estate market remains a profitable investment opportunity due to strong demand and high rental rates. Among the top 13 cities, the average rental yield stands at 3.6%, with Ahmedabad, Pune, and Kolkata showing the highest rental yield
Rental YieldsReal Estate MarketIndiaMagicbricksRental UpdateReal Estate PuneAug 01, 2024
The report noted that Navi Mumbai, Hyderabad, and Ahmedabad experienced the most significant rise in average rents. Navi Mumbai saw an increase from Rs 28.99 psf per month in Q1 2024 to Rs 30.78 psf per month in Q2 2024 (6.2% QoQ). Similarly, Hyderabad's average rents increased from Rs 22.01 psf to Rs 22.93 psf per month (4.2% QoQ), and Ahmedabad saw a rise from Rs 17.25 psf to Rs 17.94 psf per month (4% QoQ).
The report also noted a substantial quarter-over-quarter increase of 14.8% in rental demand during this timeframe, succeeding a 16% quarter-over-quarter rise in the preceding quarter. Conversely, the supply has contracted by 2.2% quarter-over-quarter across the surveyed cities, attributed to elevated absorption rates, which has resulted in an increase in rental prices.
Mumbai, Delhi, and Thane have the highest rents, with Mumbai at Rs 82.28 psf per month, Delhi at Rs 33.72 psf per month, and Thane at Rs 29.84 psf per month. The Report also noted that the average rents in Greater Noida are Rs 14.52 psf per month, Rs 20.10 psf per month in Noida, and Rs 28 psf per month in Bengaluru.
Explaining the dynamics, Abhishek Bhadra, Head of Research, Magicbricks, said, “As economic activity reaches its zenith, we foresee sustained growth in rental demand and rental prices in the short to medium term. Furthermore, the availability of rental units is projected to enhance as the inventory of properties currently under construction approaches completion. In summary, the existing market conditions offer a favorable opportunity for landlords and investors, promoting increased engagement in the rental market.
The residential real estate market remains a profitable investment opportunity due to strong demand and high rental rates. Among the top 13 cities, the average rental yield stands at 3.6%, with Ahmedabad, Pune, and Kolkata showing the highest rental yields at 3.8%, as stated in the report.
Frequently Asked Questions
What is the average rental yield in India's top 13 cities?
The average rental yield in India's top 13 cities stands at 3.6%.
Which cities have the highest rental yields?
Ahmedabad, Pune, and Kolkata have the highest rental yields at 3.8%.
What is the reason for the increase in rental prices?
The increase in rental prices is attributed to elevated absorption rates and a contraction in supply.
What is the outlook for the rental market in the short to medium term?
The outlook for the rental market is positive, with sustained growth in rental demand and rental prices expected.
What is the current average rent in Mumbai?
The current average rent in Mumbai is Rs 82.28 psf per month.
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