Rental values across key Indian cities have surged significantly, making renting increasingly unaffordable for end-users. The Rent to Price Growth Differential (RPGD) by Magicbricks indicates that cities where rental appreciation has outpaced capital value growth—such as Mumbai (3.61), Greater Noida (2.27), Delhi (2.12), Chennai (1.76), and Ahmedabad (1.46)—are becoming costlier for tenants.
As rents soar, more tenants may be encouraged to reconsider homeownership as a more financially-viable alternative. According to the report, in Q4’ 2024 alone, average rents increased 4.1% QoQ and 18.4% YoY to touch INR 37.27 psf per month as against INR 31.48 psf per month in Q4’ 2023. The increase is most evident in cities such as Greater Noida (36.3% YoY), Delhi (27.0% YoY), Bengaluru (23.2% YoY) and Noida (17.3% YoY).
However, in cities where RPGD remains below 1—Gurugram (0.58), Pune (0.38), and Hyderabad (0.31)—renting is still more affordable compared to buying, maintaining the viability of the rental market. Despite short-term fluctuations, the rental sector continues to demonstrate strong resilience, driven by urban migration and a growing workforce seeking flexible, well-located housing solutions.
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Prasun Kumar, Chief Marketing Officer, Magicbricks, says, “The demand for premium rental accommodations is rising sharply, particularly in furnished and semi-furnished segments, as tenants prioritize lifestyle amenities and convenience. However, rental price inflation is reshaping housing choices, pushing demand towards suburban and peripheral locations, thereby creating new investment opportunities in emerging rental hubs.”
The report further highlighted that geographically, rents of furnished rental units increased particularly in Chennai (10.5% QoQ), Bengaluru (5.8% QoQ), and Greater Noida (5.9% QoQ). In contrast, rents of semi-furnished properties witnessed a surge in Greater Noida (25.4% QoQ), Delhi (7.1% QoQ), and Chennai (9.0% QoQ). Unfurnished units recorded modest increase in rent in cities such as Greater Noida (7.3% QoQ), Chennai (7.7% QoQ), Delhi (9.2% QoQ), and Bengaluru (8.9% QoQ).
Commenting on the report, Aman Gupta, Director, RPS Group, said, “The rental market dynamics in Indian metropolitan cities show an interesting turn towards home ownership. As rental prices have escalated significantly – Greater Noida recording a 36.3% year-on-year growth and Delhi following suit at 27% – the conventional advantages of renting are being challenged. The Rent to Price Growth Differential (RPGD) in metros such as Mumbai (3.61) and Delhi (2.12) shows that tenants are witnessing unprecedented cost pressures, and home ownership is emerging as a more attractive long-term investment opportunity.”
LC Mittal, Director, Motia Builders Group, said, “India’s fourth quarter of 2024 saw the residential rental market undergo a dramatic shift, with average rentals rising to Rs. 37.27 per square foot per month – an 18.4% growth over the last year. This rise, especially in high-end markets, is changing housing needs and investment plans. With rental inflation beating appreciation in property prices in many major markets, the math is favorably turning for home ownership.”
Market trends present a subtle scenario of the evolution of India’s rental market. “Although Gurugram, Pune, and Hyderabad continue to have fairly cheap rental markets with RPGD at less than 1, the other large metros are witnessing dramatic rent hikes. The trend also differs according to property type, with furnished spaces in Chennai observing a 10.5% quarterly hike and Greater Noida’s semi-furnished market observing an incredible 25.4% hike. These trends indicate a tactical time for would-be homebuyers to rethink their residential choices,” said Manoj Goyal, Director, Forteasia Realty Pvt. Ltd.
