16% Y-o-Y surge in rents across 13 major Indian cities, Greater Noida, Gurugram lead: Magicbricks Report

May 8, 2024

Magicbricks has released its rental update for January-March 2024, indicating a surge in rents across 13 major Indian cities. The report highlights a 16 per cent year-on-year increase in rents, with Greater Noida, Gurugram, and Bengaluru leading the way with Y-o-Y growth rates of 32.1 per cent, 24.5 per cent, and 23.7 per cent, respectively.

The quarterly report also notes a 2.8 per cent Quarter-on-Quarter (Q-o-Q) increase in rents, following a 1.6 per cent increase in the previous quarter between October and December 2023.

According to Magicbricks, rental demand has seen a substantial 16 per cent Q-o-Q increase during the period under review. Chennai, Navi Mumbai, and Noida saw the highest demand growth rates of 24.9 per cent, 20.1 per cent, and 19.2 per cent Q-o-Q, respectively.

However, the supply of rental units increased marginally by 1.8 per cent Q-o-Q, owing to the swift absorption of available rental properties. Abhishek Bhadra, Head of Research at Magicbricks, explained the dynamics behind the surge in rents, stating, “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.”

The report further indicates that the demand for rental accommodation within the budget of ₹10,000 to ₹30,000 per month dominates the market, accounting for 42 per cent of the total demand share.

The report provides a comprehensive breakdown of rental dynamics across major cities. Ahmedabad, for instance, witnessed a Q-o-Q demand growth of 14.3 per cent and a supply increase of 0.1 per cent. Bengaluru, despite a supply decrease of 6.2 per cent, saw a demand increase of 15.0 percent Q-o-Q and a rent surge of 4.4 per cent Q-o-Q and 23.7 per cent year-on-year.

Chennai experienced a significant Q-o-Q demand growth of 24.9 per cent but a supply decrease of 22.6 per cent. Delhi saw a Q-o-Q demand growth of 14 per cent and a supply decrease of 2.7 per cent. Other cities like Greater Noida, Gurugram, Hyderabad, Kolkata, Mumbai, Navi Mumbai, Noida, Pune, and Thane also experienced varying degrees of demand and supply changes along with rent increases.

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