Bengaluru rents spike the most in past year; here’s how your city fared
Residential rental values have appreciated by nearly 25%, with four prime areas in Bengaluru seeing the highest spikes. Bengaluru’s Thanisandra Main Road and Marathahalli outer ring road witnessed the highest year-on-year growth of 24% each in the January-March quarter
India’s residential housing market is witnessing a boom. Housing prices are soaring, unsold inventory has shrunk and rental rates are on an upswing in major Indian cities. Now, a new report by Anarock Research shows that the average rent costs have risen in double digits across most major cities since last year, with Bengaluru leading the pack.
This is on the back of increasing demand for rental property post-pandemic ever since offices and schools reopened after the third Covid-19 wave.
Residential rental values have appreciated by nearly 25%, with four prime areas in Bengaluru seeing the highest spikes. Bengaluru’s Thanisandra Main Road and Marathahalli outer ring road witnessed the highest year-on-year growth of 24% each in the January-March quarter.
Anarock’s analysis included prime areas of the top seven cities namely Delhi-NCR, Hyderabad, Chennai, Kolkata, Mumbai, Bengaluru and Pune, for a 2BHK home of 1,000 sq. ft. area. In east Bengaluru’s Marathahalli outer ring road, average monthly rentals increased from ₹22,500/month last year to ₹28,000/month in Q12023.
Similarly, Whitefield, an upscale locality in Bengaluru known for its tech parks, saw its average rent grow to ₹26,000 in Q1 from close to ₹22,000 in the same period last year. Key suburbs in Mumbai and the satellite city of Thane saw rental value grow 14-17%. For instance, rental values in Chembur rose 17% to ₹58,000 from ₹49,500 a year ago. Average rental values in Ghodbunder area in Thane rose 14% in Q1 of this year.
The top three areas in NCR – namely Sohna Road, Sector 150 in Noida and Dwarka – saw rental amounts rise 13%, 15% and 10% respectively. Two out of three markets in Chennai saw among the lowest rise in average rental values. Rents in Organdam and Perambur rose by 11% and 10%, the lowest among all micro-markets covered.
Property sales and inventory
Not just rent spikes, housing prices also rose 7% in Q1 2023 in top 14 cities, according to PropEquity. New property launches, sale numbers and lower inventory also point to a buoyancy in the housing sector till now this year. The seven cities recorded new launches of around 109,600 units in Q1 2023 against 89,100 units in Q1 2022 and 92,900 units in Q4 2022, an on-year rise of 23% and 18% sequential growth, shows another CII-Anarock report released this month. On the other hand, residential sales grew 14% year-on-year to 113,000 units in the first three months of 2023 – highest in a decade – from 99,500 units sold in this period last year. “Maximum housing sales in Q1 2023 were recorded in MMR, Pune, and NCR, collectively representing 63% of the total sales,” according to the report.
Positively, the increased appetite for owning that dream house is being driven by millennials. In a survey of 4,662 participants, 61% saw investing in real estate as a preferred asset class. Within this, 52% were millennials vis-à-vis 30% from Gen X (generally considered the age group of 43-58 years old).
What could play a spoiler to the ongoing housing boom party? The warning signs of impending global recession, continued inflation, and repo rate hikes are likely to have short-term impact on the housing sales market, say analysts, as people may choose to go into a wait-and-watch mode.
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First Published:26 Apr 2023, 07:24 PM IST
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