Residential rental values are surging in India's top 7 cities, particularly in IT hubs like Bengaluru, Hyderabad, and Pune, according to ANAROCK Research. Bengaluru's Whitefield witnessed a remarkable 31% growth in rents for a standard 2BHK flat in the first nine months of 2023, leading the trend. Hyderabad and Pune followed with up to 24% and 17% growth, respectively, in key localities. However, rental values may stabilize in the current quarter before potentially rising again in early 2024. Bengaluru boasts the highest rental yield at 4.35%, drawing renewed interest from investors in the housing market.
Housing rental values are experiencing significant growth, particularly in IT/ITeS hubs such as Bengaluru, Hyderabad, and Pune, according to the latest ANAROCK Research data. In Bengaluru, prominent areas like Whitefield witnessed a remarkable 31% increase in residential rents for a standard 2BHK flat of around 1,000 sq. ft. from the end of 2022 to September 2023. Similarly, Sarjapur Road saw a 27% rise in rents during the same period. In Hyderabad, another IT hotspot, rental values in key markets, including HITECH City and Gachibowli, surged by up to 24%. HITECH City experienced a 16% growth, with average rents increasing from INR 24,600/month at the end of 2022 to INR 28,500/month by Q3 2023. Gachibowli, on the other hand, saw a substantial 24% increase, rising from INR 23,400/month to INR 29,000/month during the same nine months. Pune also demonstrated notable rental value growth, with the Hinjewadi micro-market leading at a 17% increase from INR 21,000/month in 2022-end to INR 24,500/month by September 2023. Despite these surges, experts predict a potential stabilization of rental values in the current quarter, as renting traditionally slows down in the last quarter of the year. However, the market is anticipated to regain momentum in the first quarter of the following year, coinciding with increased hiring and job relocations. Apart from these IT cities, other regions recorded noteworthy rental value growth in their prominent localities. Chennai's Pallavaram and Perambur, NCR's Sohna Road, Sector 150 in Noida, and Dwarka in Delhi, as well as MMR's Chembur and Mulund, and Kolkata's EM Bypass and Rajarhat, all experienced considerable rise in rental values, ranging from 9% to 14%. Notably, the residential rental yield - the annual ROI from capital invested in a property - has seen a positive shift in India. Bengaluru boasts the highest rental yield at 4.35% as of September 2023-end, followed by Mumbai at 4.05%, marking a notable increase since the pre-Covid era in 2019 when Bengaluru held the highest yield at 3.6%. This surge in rental demand post-Covid has rekindled investor interest in the housing market. Despite fluctuations, the positive shift in rental yields, reflects the resilience and potential of the Indian housing market.
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