According to data from Anarock Property Consultants Pvt, Bengaluru’s key areas have seen housing rents jump by over 20% year-on-year during the first quarter of 2023.
The consultancy analysed monthly rents across prominent areas of the top seven cities—Hyderabad, National Capital Region, Mumbai Metropolitan Region, Kolkata, Bengaluru, Pune and Chennai.
Bengaluru
Across these seven cities, three regions that have witnessed the highest growth in residential rental value are from Bengauluru
Thanisandra Main Road and Marathahalli-ORR saw residential rental values go up by 24% each between Q1 2022 and Q1 2023, according to Anarock.
Whitefield witnessed the second highest growth in rental value at 21%, in the same period.
Explaining the increase
Abhishek Tripathi, co-founder, Settl, said: “In a place like Bangalore during the pandemic, huge capital was deployed into hiring talent, especially in the IT sector and startups.
During the same time, due to labour shortage, the increase in building supply was restricted and when the lockdown restrictions were removed and offices started to open up, people started moving to tier-I cities and settling down.
This disparity has created a housing crisis, especially in tier 1 cities in Bangalore.
Hence, the increase in rent is a result of these multifarious factors”
Forecasts
“When it comes to rental demand and zooming rents, Bengaluru currently stands out among the top seven cities.
We anticipate residential rental values in the IT capital’s prominent markets to rise further by anywhere between 5-12% in 2023, depending on the location, property, builder-type and other aspects.
In housing societies with limited supply but high demand, the rents could easily rise beyond 12%,” said Prashant Thakur, senior director and head, research, Anarock.
Other cities also recorded notable growth in rental value, as the residential rental demand has soared ever since offices and schools reopened following the pandemic.
Pune, MMR
After the aforementioned regions in Bengaluru, Pune’s Hinjewadi had the next highest growth in rentals at 19%.
Baner, and Wagholi came next when it comes to the top three standout markets with high rental growth which witnessed rental value growth of 19 percent, 15 percent, and 13 percent, respectively.
In MMR, the top three regions for rental value growth were Chembur, Ghodbunder Road (Thane) and Mulund, which saw growth of 17%, 14% and 14%, respectively.
Delhi
The NCR witnessed a rental value growth of up to 15% in Sector 150, Noida
The other key markets were Sohna Road in Gurugram (rental values increased by 13 percent), Sector-150 in Noida (15 percent growth), and Dwarka in Delhi with a rental value growth of 10 percent.
Chennai
Chennai witnessed a growth of up to 16% in Pallavaram.
Other key markets to witness high rental value growth in Chennai are Perambur, and Oragadam, with rents in this period growing by 10 percent, and 11 percent, respectively.
Kolkata
Kolkata’s top three markets with high rental value growth between Q1 2022 and Q1 2023 were EM Bypass, Joka, and Rajarhat, where rents rose by 13 percent, 11 percent, and 10 percent, respectively.
Hyderabad
In Hyderabad, the top three markets were HITECH City and Kondapur, which saw rental values increase by 12 percent each, and Gachibowli with 11 percent growth
Rental Yields
Among the top seven cities, Bengaluru has the highest rental yield at 4.1% as of Q1 2023-end, followed by Mumbai with 3.9%.
Residential rental yield refers to the annual rate of return an investor can earn from capital invested in a property.
The national average had been 3% before the pandemic.
Rental yield in Bengaluru pre-Covid was 3.6%—the highest at the time as well.
