With the surge in new housing supply, the rental price growth has dropped by around 50 percent in top cities, according to a report by ANAROCK, a real estate consultancy.
The report stated that the residential rentals in key micro markets across top cities have witnessed between 2-4 percent quarterly growth in the second quarter of the calendar year 2024 till date, while the quarterly rental growth in Q1 2024 was almost double ranging between 4 and 9 percent across markets.
The ANAROCK data showed that the top seven cities – Delhi NCR, Mumbai, Bengaluru, Hyderabad, Chennai, Kolkata and Pune – are set to deliver approximately 531,000 new units in 2024 while in 2023, these cities saw around 435,000 units hit their markets. This denotes a 22 percent annual supply increase in 2024 if delivery schedules remain on track.
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Average rents for a standard 1,000 sqft 2BHK in Bengaluru’s Whitefield rose by 4 percent from Rs 32,500 per month in January-March quarter of 2024 to Rs 35,000 per month in Q2 2024 till date. In Q1 2024, the quarterly jump against Q4 2023 was double at 8 percent.
Data showed that average rents for a 2BHK in Noida Sector 150 rose by a mere 4 percent from approximately Rs 24,000 per month in Q1 2024 to around Rs 25,000 per month in the current quarter till date. However, the quarterly hike for the region stood at 9 percent in Q1 2024 against Q4 2023.
Similarly, Sohna Road in Gurugram and Dwarka in New Delhi saw their respective quarterly rents increase by 3 percent and 2 percent in Q2 2024 while in Q1 2024, the hikes stood at 4 percent and 6 percent respectively for these areas.
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MMR’s key markets Chembur and Mulund saw average rents rise by just 2 percent against the preceding quarter Q1 2024. In Q1 2024, the growth in rents was over 4 percent against Q4 2023.
“In India, the second quarter of most years typically sees rents increase more than in other quarters due to the commencement of the new academic year and the employment of new staff. This year, declining rental value growth coincides with substantial new housing supply entering these markets,” said Santhosh Kumar, vice chairman, ANAROCK group.
New housing supply
Among the top 7 cities, MMR is slated to see the highest completions at 160,900 units in 2024. In 2023, the region saw approximately 143,500 units completed. NCR is expected to see approximately 144,315 units delivered in 2024, against around 114,280 in 2023.
Bengaluru, the key rental hub with the highest rental value hikes, is likely to see around 51,685 units delivered in 2024, against approximately 52,565 units in 2023. Hyderabad is slated to see around 34,770 units completed by 2024-end while in 2023, approximately 20,500 units were completed.
Chennai will see the delivery of approximately 17,580 units in 2024, against 14,125 units in 2023, the data showed.
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