Rising Rents: India Sees Up To 64% Increase Over 5 Years, Says Report

The average rent for a standard two-bedroom house spanning 1,000 square meters in seven major cities has skyrocketed by a whopping 64 per cent since 2019, according to a report

The real estate market in India has experienced a significant surge in the average rent for a standard two-bedroom house spanning 1,000 square meters in seven major cities. According to a report, the rent has skyrocketed by up to 64 per cent since 2019. However, this upward trajectory experienced a temporary slowdown during the April-June quarter of the financial year 2023-24 (FY24) due to a robust increase in supply, as indicated by real estate consultancy Anarock’s report released on Tuesday.

Rent Growth In Metros:

In Sector 150 of Noida, within the National Capital Region (NCR), average rents surged by 63.3 per cent to Rs 25,000 in the second quarter of FY24 from Rs 15,500 in FY19. Similarly, in Dwarka, located in southwestern Delhi, rents increased by 43.5 per cent to Rs 28,000 from Rs 19,500 over the same period.

In the Mumbai Metropolitan Region, Chembur recorded the highest average rent for a two-bedroom home at Rs 63,500, a 41.1 per cent increase from Rs 45,000 in 2019. Following Chembur is Mulund, a suburb in northwest Mumbai, where the average rent has risen by 28.7 per cent to Rs 49,700 from Rs 38,600 in 2019. Bengaluru's Sarjapur Road comes next, with an average rent of Rs 35,000, up from Rs 21,000 in 2019.

Slow Down In FY24:

Residential rental rates in prominent micro markets across major cities saw a moderate rise of 2-4 per cent in the second quarter of FY24, following more substantial growth rates of 4-9 per cent in the preceding quarter, as per the report. Specifically, in Noida's Sector-150, average rents increased by 4 per cent in Q2 2024, down from 9 per cent in Q1. Similarly, Sohna Road in Gurgaon and Dwarka in Delhi experienced 3 per cent and 2 per cent rent increases, respectively, in Q2 2024, compared to 4 per cent and 6 per cent increases in Q1.

Chembur and Mulund in Mumbai saw average rents rise by 2 per cent in Q2 relative to Q1. Meanwhile, Hyderabad's HITECH City and Gachibowli saw a 3 per cent increase in average rents during Q2, down from a 5 per cent increase in both areas during Q1 2024.

Speaking on the report’s findings, Santhosh Kumar, vice-chairman of Anarock Group, said, “In India, the second quarter of most years typically sees rents increase more than in other quarters due to the commencement of the new academic year and the employment of new staff. This year, declining rental value growth coincides with substantial new housing supply entering these markets."

Number of New Units In 2024:

The report claims that the seven most prominent cities in India are all set to introduce 531,470 new housing units in 2024, marking a 22 per cent increase from the 435,045 units delivered in 2023. The Mumbai Metropolitan Region will lead with 160,900 units, followed by 144,315 units in the National Capital Region (NCR) and 97,000 units in Pune.