Rental Market Surges: Indian Rents Up 7.4% QoQ; Chennai, Delhi, Thane Show Significant Hikes
India's rental market is booming, with average rents rising by 7.4% QoQ across 13 major cities, according to a report by Magicbricks. Chennai, Delhi, and Thane have seen the sharpest hikes.
Rental MarketProperty PricesMagicbricksQoq GrowthIndian CitiesReal Estate MumbaiNov 18, 2024
Chennai recorded the sharpest increase, with rents soaring 22.2% QoQ from Rs 17.94 per square foot in Q2 2024 to Rs 26.91 per square foot in Q3 2024. Delhi and Thane also experienced notable hikes, with Delhi's average rent climbing 11.4% QoQ to Rs 37.55 per square foot, and Thane's rent rising 10.9% QoQ to Rs 33.10 per square foot.
The report highlights Mumbai as the priciest rental market at Rs 86.50 per square foot per month, followed by Delhi at Rs 37.55 per square foot and Navi Mumbai at Rs 33.83 per square foot. Conversely, developing markets like Greater Noida (Rs 15.48 per square foot), Noida (Rs 21.32 per square foot), and Kolkata (Rs 22.14 per square foot) remain more affordable.
Prasun Kumar, Chief Marketing Officer of Magicbricks, commented on the findings, stating, 'This year, rental demand has shown a strong quarter-on-quarter surge, driving rents to the sharpest increase we've seen over the past eight quarters. It's evident that ready-to-move apartments are increasingly being purchased for self-use, contributing to a decline in rental supply. Meanwhile, the rise in under-construction supply suggests potential for market balance in the coming quarters as more inventory becomes available.'
The report also detailed a significant 14.8% QoQ increase in rental demand during the previous quarter (April to June 2024), which continued to rise at a slower pace of close to 2% in the third quarter (July to September). However, the supply of rental properties declined by 6.7% QoQ during this period, creating an imbalance that has driven rental prices upward.
Additionally, the report noted that gross rental yields across the 13 cities reached 3.62%. Ahmedabad led with the highest yield at 3.9%, followed by Hyderabad, Kolkata, and Pune at 3.7% each. Chennai saw the largest QoQ yield growth at 21.3%, while Delhi, Hyderabad, and Navi Mumbai reported strong increases at 8.8%, 5.4%, and 5.3% respectively. However, cities like Greater Noida, Gurugram, Kolkata, Mumbai, Noida, and Pune experienced declines in yields as property price growth outpaced rental rate growth.
Magicbricks, a prominent name in the Indian real estate sector, has been providing valuable insights into the property market for many years. Their latest report underscores the dynamic nature of the rental market and highlights key trends and challenges in major cities across India.
Frequently Asked Questions
What is the current rental rate in Mumbai?
The current rental rate in Mumbai is Rs 86.50 per square foot per month, making it the priciest rental market in the 13 major cities surveyed.
Which city saw the highest QoQ increase in rental prices?
Chennai saw the highest QoQ increase in rental prices, with a 22.2% rise from Rs 17.94 per square foot in Q2 2024 to Rs 26.91 per square foot in Q3 2024.
What factors are driving the increase in rental prices?
The increase in rental prices is being driven by a strong quarter-on-quarter surge in rental demand and a decline in the supply of rental properties. Ready-to-move apartments are increasingly being purchased for self-use, contributing to this decline in rental supply.
What is the gross rental yield across the 13 cities surveyed?
The gross rental yield across the 13 cities surveyed reached 3.62%, with Ahmedabad leading at 3.9%, followed by Hyderabad, Kolkata, and Pune at 3.7% each.
How has the rental demand changed in the third quarter of 2024?
Rental demand increased significantly by 14.8% QoQ during the second quarter of 2024, and continued to rise at a slower pace of close to 2% in the third quarter (July to September 2024).
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