Housing rent surges by 30 percent in Bengaluru; Highest growth in nine months
Housing rent surges by 30 percent in Bengaluru
In the initial three quarters of this year, Bengaluru has witnessed a significant surge in housing rents. According to a report released by Anarock Property Consultants on Thursday, the residential rent in India’s IT hub has escalated by up to 31%.
Notably, the rental prices for a typical 2BHK flat spanning approximately 1,000 sqft in Bengaluru’s Whitefield area experienced a remarkable growth of 31% between January and September. Similarly, Sarjapur Road also observed a substantial rise in rents, with an increase of 27% during the same period.
The average monthly rent for a standard 2BHK home measuring 1,000 sqft in Whitefield witnessed an increase from ₹24,600 per month at the end of 2022 to ₹28,500 per month by the end of September 2023. Similarly, at Sarjapur Road, the average monthly rents rose from ₹24,000 per month at the end of 2022 to ₹30,500 per month in September 2023.
It is worth noting that housing rents have experienced a significant surge not only in Bengaluru but also in other metropolitan cities such as Hyderabad, Pune, Delhi, and Mumbai. Hyderabad and Pune, being the other two prominent IT/ITeS hubs in the country, have also emerged as hotspots for rental growth.
Hyderabad experienced a significant growth of 24% during the mentioned period, according to the Anarock report. The average monthly rent in the technologically advanced city reached ₹24,600 by the end of 2022, and by September 2023, it escalated to ₹28,500, reflecting a 16% increase over the nine-month period. Similarly, the rental prices in Gachibowli surged by 24% during the same timeframe, soaring from ₹23,400 per month at the end of 2022 to ₹29,000 per month by September of the current year.
In the Hinjewadi micro-market of Pune, there was a notable growth of 17% in rental values over the past nine months. The average monthly rents in this area were ₹21,000 at the end of 2022, and by September 2023, they had risen to ₹24,500.
The rental values in certain areas of Delhi-NCR have experienced a significant increase between January and September. Sohna Road in Gurugram has seen an 11% rise, while Sector-150 in Noida and Dwarka in Delhi have witnessed a growth of 13% and 14%, respectively. Similarly, in Mumbai, Chembur and Mulund have emerged as the top two markets with a rental value rise of 14% and 9%, respectively, during the same period.
In Chennai, Pallavaram and Perambur have experienced a growth of 12% and 9%, respectively, in housing rentals. Kolkata’s EM Bypass and Rajarhat have emerged as the top two markets with a high rental value growth of 14% and 9%, respectively, in nine months.
Notably, the annual ROI from capital invested in a property was never attractive. However, with rental demand picking up after Covid-19 pandemic in 2022, there has been a considerable change as investors are back on the housing market, the Anarock report claimed.
Residential rents have experienced a remarkable resurgence in the post-pandemic housing sector, following a significant downturn during the initial and subsequent waves of Covid-19. According to Anuj Puri, Chairman of the ANAROCK Group, housing rents in the top 7 cities soared by over 30% during the first nine months of 2023.
Among the country’s top metro cities, Bengaluru currently boasts the highest rental yield of 4.35% as of September 2023-end, closely followed by Mumbai at 4.05%. Prior to the Covid-19 pandemic in 2019, Bengaluru held the highest rental yield of 3.6% for that year.
Looking ahead, the Chairman of the Anarock Group anticipates a further increase in rents in the coming months. He stated that rents will once again gain momentum during the January to March period, as Indians typically relocate in search of better job opportunities amidst increased hiring in the new financial year.
