Stabilizing Housing Rents: A Shift in the Indian Real Estate Market
Average residential rental prices across key markets in India's top 7 cities saw a 2-4% quarterly rise in Q2 2024, with substantial new housing supply entering the markets.
Housing RentsIndian Real EstateAnarockIndia RatingsResidential Rental PricesReal Estate NewsJun 18, 2024
In the past, the second quarter of the year typically sees rents increase more than in other quarters due to the commencement of the new academic year and the employment of new staff. However, this year, the declining rental value growth coincides with substantial new housing supply entering these markets.
Cities like Bengaluru, Noida, Mumbai, and Hyderabad are witnessing a moderate rise in rents. For instance, average rents for a standard 1,000 sq.ft. 2 BHK in Bengaluru's Whitefield rose by 4% in Q2 2024 to date. In contrast, Mumbai's Chembur and Mulund saw a 2% rise against 4% in Q1.
Anarock predicts that the top 7 cities are set to deliver around 5.31 lakh new units in 2024, a 22% annual supply increase from 2023. However, India Ratings finds that the Tier-1 residential real estate inventory stock of the top eight cities is comfortable compared to historical levels. The high base of absorption should sustain and help ward-off any oversupply risk.
Information
Anarock is a leading real estate consultancy firm that provides expert insights and analysis on the Indian real estate market. India Ratings is a credit rating agency that provides ratings and research on various sectors, including real estate.
Anarock Group is a leading real estate consultancy firm that provides expert insights and analysis on the Indian real estate market. Santhosh Kumar is the Vice Chairman of Anarock Group. India Ratings is a credit rating agency that provides ratings and research on various sectors, including real estate.
Frequently Asked Questions
What is the average quarterly rise in residential rental prices in Q2 2024?
2-4% quarterly rise in Q2 2024 over the preceding quarter.
Why do rents typically increase in the second quarter of the year?
Due to the commencement of the new academic year and the employment of new staff.
How many new units are expected to be delivered in 2024 in the top 7 cities?
Around 5.31 lakh new units in 2024.
What is the current finished inventory to absorption ratio in the top 8 cities?
About 14% compared to the historical band of 35%.
What is the outlook for the Indian real estate market in terms of oversupply risk?
The high base of absorption should sustain and help ward-off any oversupply risk.
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