Rental price growth drops 50% in top cities

“In India, Q2 of most years sees rents rise more than in other quarters due to the commencement of the new academic year and the employment of new staff.”
Rental price growth drops 50% in top cities

NEW DELHI: A sharp surge in the supply of new housing units has resulted in a nearly 50% drop in rental price growth in India’s top cities during the second quarter of calendar year 2024.

Property consultant Anarock’s data shows average residential rental prices across key markets in top 7 cities saw a 2-4% quarterly rise in Q2, 2024 to date over the preceding quarter. Q1, 2024 saw rents in these markets rise by between 4-9% quarterly against Q4, 2023.

The fall in rent comes as the top 7 cities are set to deliver 5.31 lakh new units in 2024, 22% annual supply rise this year if delivery schedules remain on track. In 2023, these cities saw 4.35 lakh units hit markets.

Average rents for a standard 1,000 sq.ft 2 BHK in Bengaluru’s Whitefield rose 4% from Rs 32,500/month in Q1, 2024, to Rs 35,000/month in Q2 of 2024 to date. In Q1, 2024, the quarterly jump against Q4, 2023, was double at 8%. Santhosh Kumar, vice-Chairman, ANAROCK Group, said, “In India, Q2 of most years sees rents rise more than in other quarters due to the commencement of the new academic year and the employment of new staff.”

Anarock data highlights that Avgerage rents in Noida’s Sector 150 rose by 4% - from Rs 24,000/month in Q1, 2024 to Rs 25,000/month in this quarter. The quarterly hike stood at 9% in Q1, 2024 against Q4, 2023. Mumbai Metropolitan Region’s key markets Chembur and Mulund saw average rents rising by just 2% against the last quarter (Q1 2024); in Q1, 2024, they rose by 4% against Q4 2023.

Hyderabad’s HITECH City and Gachibowli saw avg. rents rise 3% each in Q2, 2024 to date over last quarter. Supply-wise, MMR is slated to see the highest completions at 1,60,900 units in 2024. Pune is likely to see 97,000 units completed in 2024.

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