India’s major cities – including Delhi, Mumbai, Pune, Hyderabad, Kolkata, Gurugram and Noida – have recorded sustained growth in rental yields during the Q2 2024. Rents increased by 2.6% QoQ and 14.6% YoY across the nation’s 13 key cities to an average Rs 33.3 psf per month, according to Magicbricks’ flagship Rental Update (April-June 2024).

As per the report, Navi Mumbai, Hyderabad, and Ahmedabad experienced the most significant rise in average rents, with Navi Mumbai seeing an increase from Rs 28.99 psf per month in Q1 2024 to Rs 30.78 psf per month in Q2 2024 (6.2% QoQ). Similarly, Hyderabad’s average rents increased from Rs 22.01 psf to Rs 22.93 psf per month (4.2% QoQ), and Ahmedabad saw a rise from Rs 17.25 psf to Rs 17.94 psf per month (4% QoQ).

The report noted a substantial quarter-over-quarter increase of 14.8% in rental demand during this timeframe, succeeding a 16% quarter-over-quarter rise in the preceding quarter. Conversely, the supply has contracted by 2.2% quarter-over-quarter across the surveyed cities, attributed to elevated absorption rates, which has resulted in an increase in rental prices.

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Mumbai, Delhi, and Thane have the highest rents, with Mumbai at Rs 82.28 psf per month, Delhi at Rs 33.72 psf per month, and Thane at Rs 29.84 psf per month. The Report also noted that the average rents in Greater Noida are Rs 14.52 psf per month, Rs 20.10 psf per month in Noida, and Rs 28 psf per month in Bengaluru.

Explaining the dynamics, Abhishek Bhadra, Head of Research, Magicbricks, said, “As economic activity reaches its zenith, we foresee sustained growth in rental demand and rental prices in the short to medium term. Furthermore, the availability of rental units is projected to enhance as the inventory of properties currently under construction approaches completion. In summary, the existing market conditions offer a favorable opportunity for landlords and investors, promoting increased engagement in the rental market.”

The residential real estate market remains a profitable investment opportunity due to the strong demand and high rental rates. Among the top 13 cities, the average rental yield stands at 3.6%, with Ahmedabad, Pune, and Kolkata showing the highest rental yields at 3.8%, as stated in the report.

Source: Magicbricks Research