Housing Rentals Jump 15.7% in Q1 2025: Pune and Bengaluru Lead Surge Amid Soaring Demand, Tight Supply
Housing Rentals Jump 15.7% in Q1 2025: Pune and Bengaluru Lead Surge Amid Soaring Demand, Tight Supply
India’s real estate market continues to show strong momentum, with average housing rentals in major metro cities increasing sharply in the first quarter of 2025. According to Magicbricks, rentals rose by up to 15.7%, driven by robust demand in cities like Bengaluru and Pune.
Bengaluru saw the highest quarterly rental hike at 15.7%, followed by Pune at 12.5%. Mumbai’s rental market also recorded significant growth, with a 10.2% increase, while Delhi, Noida, and Kolkata posted gains of 7.3%, 7.9%, and 10.2% respectively. Chennai and Hyderabad registered comparatively modest growth at 5.6% and 4.8%. In the NCR region, Greater Noida and Gurugram saw slower rental increases at 3.2% and 4.1%, indicating early signs of stabilization.
The rising rental costs reflect a broader surge in demand. Residential property searches across 13 metro cities rose 7% year-on-year between July and September 2024, outpacing a 3.1% increase in rental searches. Bengaluru, Delhi, and Mumbai topped the charts for residential interest, with Bengaluru alone recording an 18.2% quarter-on-quarter rise in home searches. However, the city saw a 2.8% dip in rental demand during the same period. Delhi experienced growth across both categories, with rental demand up 9.9% QoQ, while Mumbai saw a decline in rental interest despite a rise in home searches.
Demand continues to shift based on affordability. In Mumbai, 43% of rental demand was concentrated in the Rs 50,000–Rs 1,00,000 per month range, while Gurugram and Bengaluru followed with 37% and 26% respectively. In contrast, cities like Ahmedabad (49%), Pune (38%), and Navi Mumbai (32%) saw the majority of demand in the Rs 20,000–Rs 30,000 range. Greater Noida remained the most affordable metro, with 86% of rental searches focused on properties under Rs 20,000.
Rental investments have also become more attractive. Gross rental yields improved across most cities in Q1 2025. Ahmedabad saw the biggest jump from 3.6% to 4.2% year-on-year. Bengaluru, Hyderabad, and Mumbai also recorded slight increases, reflecting the growing viability of rental income as an investment strategy.
The ongoing rise in rentals is placing pressure on housing supply, especially in the mid-to-premium segments. Analysts warn that the mismatch between demand and supply is widening, making it essential for developers and urban planners to expand the rental housing stock and improve infrastructure.
Meanwhile, India’s residential property market remained strong, with home sales across the top eight cities reaching 87,108 units in Q3 2024—a 5% year-on-year increase and the highest quarterly volume of the year. Total sales for the first nine months of 2024 stood at 2,60,349 units, a 9% jump from 2023 levels. Mumbai led with 24,222 units sold, its best performance since 2018.
The data underscores a continued upswing in both housing purchases and rentals, with metro markets, especially Bengaluru and Pune, setting the pace for India’s urban real estate landscape.
