Noida, Gurgaon, Bengaluru register around 30 percent rent hike, highest in India

Rental prices in 13 major Indian cities have surged by 16% year-on-year in the March quarter, according to a report by Magicbricks. Greater Noida witnessed the highest increase, with rents soaring by 32.1%. Gurugram and Bengaluru followed closely with growth rates of 24.5% and 23.7%, respectively.

In Greater Noida, an emerging home to several techies and corporate employees, rents soared 32.1% while Gurugram and Bengaluru saw an increase of 24.5% and 23.7%, respectively. Sequentially, rents increased by 2.8% during the Jan-March period, following an increase of 1.6% between Oct and Dec 2023, Magicbricks said in a statement.

Demand and Supply Trends

The report, based on the preferences of over two crore customers, reveals that rental accommodation in the range of Rs 10,000 to Rs 30,000 per month was the most sought-after, accounting for 42% of the total demand. Chennai, Navi Mumbai, and Noida led the rental demand on a quarterly basis. However, the supply of rental units increased only marginally by 1.8% quarter-on-quarter (Q-o-Q), indicating a supply-demand mismatch.

Expert Insights
Abhishek Bhadra, Head of Research at Magicbricks, explained the driving factors behind the surge in rents. "Prior to 2020, residential rental yields in India were averaging around 3 percent. However, since 2022, following the resumption of office operations, we've witnessed a notable surge in rental demand, consequently driving up rents and offering higher yields to landlords."

He added, "We anticipate this upward trend in rents to persist over the next few months, particularly as rental activity typically peaks in the first two quarters of the fiscal year. Notably, residential and IT hubs like Bengaluru, Gurugram, Hyderabad, and Noida have experienced significant increases in their rental yields, in line with our expectations."

Future Outlook
The rental surge in major Indian cities indicates a shifting trend in the real estate market, driven by factors such as the resumption of office operations and changing preferences of tenants. As rents continue to rise, both landlords and tenants will need to adapt to the evolving dynamics of the rental market.

The surge in rental prices across major Indian cities highlights the need for a balanced approach to rental policies and real estate development. With demand outpacing supply in many areas, stakeholders will need to collaborate to ensure the availability of affordable rental housing options for all.

(With inputs from ANI, TOI)