Rent Prices in Major Indian Cities Skyrocket by Up to 64% Since 2019: Anarock Report

Services

Equity Trading with CA Abhay

Stock Market Masterclass

Equity Investment with CA Abhay

Option Trading with CA Abhay

FNO Stocks with CA Abhay

Surge in Rent Prices Across Major Indian Cities Reaches Up to 64% Since 2019

Team Finance Saathi

19/Jun/2024

Key Points:

Rent prices in major Indian cities have surged by up to 64% since 2019, with significant increases in Noida, Delhi, and Mumbai.
The average rent for a two-bedroom house in Sector 150, Noida, jumped by 63.3% to Rs. 25,000, while Dwarka, Delhi saw a 43.5% increase to Rs. 28,000.
Mumbai's Chembur recorded the highest average rent of Rs. 63,500 for a two-bedroom home, reflecting a 41.1% rise from 2019.

The Indian real estate market has witnessed a significant transformation over the past few years, with rental prices in seven major cities experiencing dramatic increases. According to a report by real estate consultancy Anarock, the average rent for a standard two-bedroom house spanning 1,000 square feet has surged by up to 64% since 2019.

Sector 150, Noida: In Sector 150, Noida, a prominent location within the National Capital Region (NCR), the rental prices have seen a steep increase of 63.3%. The average rent rose to US$ 299.75 (Rs. 25,000) in the second quarter of FY24 from US$ 185.85 (Rs. 15,500) in FY19. This area has become highly sought after due to its strategic location and infrastructural developments, making it a hotspot for residential investments.

Dwarka, Delhi: Similarly, Dwarka in southwestern Delhi has experienced a 43.5% rise in rent prices, with the average rent increasing to US$ 335.74 (Rs. 28,000) from US$ 233.82 (Rs. 19,500) in 2019. This surge can be attributed to the region's excellent connectivity, burgeoning commercial hubs, and quality of life, attracting a growing number of residents and businesses alike.

Mumbai Metropolitan Region: Mumbai, known for its high cost of living, continues to dominate the rental market. Chembur, a well-developed suburb in the Mumbai Metropolitan Region, recorded the highest average rent for a two-bedroom home at US$ 761.40 (Rs. 63,500), marking a 41.1% increase from US$ 539.58 (Rs. 45,000) in 2019. Another suburb, Mulund, saw a rise of 28.7%, with average rents climbing to US$ 595.93 (Rs. 49,700) from US$ 462.84 (Rs. 38,600) in the same period.

Bengaluru's Sarjapur Road: Bengaluru, the Silicon Valley of India, has also seen notable increases in rental prices. Sarjapur Road, a major IT corridor, experienced a significant hike with rents rising to US$ 419.67 (Rs. 35,000) from US$ 251.80 (Rs. 21,000) in 2019. The area's proximity to tech parks and educational institutions makes it a preferred location for professionals and families.

Deceleration in Rent Growth: Despite these sharp increases, the report notes a deceleration in rent growth in the second quarter of FY24. Residential rentals in key micro-markets of top cities increased by 2-4%, compared to 4-9% in the first quarter. For instance, Noida's Sector 150 saw a 4% rent increase in the second quarter, down from 9% in the first quarter. Similarly, Sohna Road in Gurgaon and Dwarka in Delhi experienced rent rises of 3% and 2%, following 4% and 6% increases in the previous quarter.

Future Projections: Mr. Santhosh Kumar, Vice-Chairman of Anarock Group, attributes the declining rental value growth to the substantial new housing supply entering these markets. India's seven largest cities are expected to deliver 531,470 new units in 2024, a 22% increase from the 435,045 units delivered in 2023. The Mumbai Metropolitan Region is set to lead this surge with 160,900 new units, followed by 144,315 in NCR and 97,000 in Pune.

This influx of new housing units is anticipated to moderate the rental market, offering more options for tenants and potentially stabilizing rent prices. However, the long-term impact on rental trends will depend on various factors, including economic conditions, government policies, and market dynamics.

In conclusion, the Indian rental market has experienced significant growth in recent years, with major cities witnessing substantial increases in rent prices. While the rate of increase has slowed down in recent quarters, the overall trend indicates a robust demand for rental housing. The projected influx of new housing units in 2024 is expected to provide some relief, potentially stabilizing the market and offering more choices for renters. As the market continues to evolve, staying informed about these trends will be crucial for both tenants and investors.
Also Read : Supreme Court Warns NTA Over NEET Irregularities, Demands Strict Action

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst & Finance Saathi Telegram Channel for Regular Share Market, News & IPO Updates

Services

Surge in Rent Prices Across Major Indian Cities Reaches Up to 64% Since 2019

Related News