Magicbricks, India’s leading real estate platform, has released its latest report indicating a significant rise in rental prices across the country. Between July and September 2024, average rents increased by 7.4% quarter-on-quarter (QoQ) across 13 major Indian cities, reaching Rs 35.8 per square foot per month. This marks the highest rental rate observed in the last two years.
Chennai recorded the sharpest increase, with rents soaring 22.2% QoQ from Rs 17.94 psf in Q2 2024 to Rs 26.91 psf in Q3 2024. Delhi and Thane also experienced notable hikes, with Delhi’s average rent climbing 11.4% QoQ to Rs 37.55 psf, and Thane’s rent rising 10.9% QoQ to Rs 33.10 psf.
The report highlights Mumbai as the priciest rental market at Rs 86.50 psf per month, followed by Delhi at Rs 37.55 psf and Navi Mumbai at Rs 33.83 psf. Conversely, developing markets like Greater Noida (Rs 15.48 psf), Noida (Rs 21.32 psf), and Kolkata (Rs 22.14 psf) remain more affordable.
Prasun Kumar, Chief Marketing Officer of Magicbricks, elaborated on the findings, stating, “This year, rental demand has shown a strong quarter-on-quarter surge, driving rents to the sharpest increase we’ve seen over the past eight quarters. It’s evident that ready-to-move apartments are increasingly being purchased for self-use, contributing to a decline in rental supply. Meanwhile, the rise in under-construction supply suggests potential for market balance in the coming quarters as more inventory becomes available.”
The report detailed a significant 14.8% QoQ increase in rental demand during the previous quarter (April to June 2024), which continued to rise at a slower pace of close to 2% in the third quarter (July to September). However, the supply of rental properties declined by 6.7% QoQ during this period, creating an imbalance that has driven rental prices upward.
Additionally, the report noted that gross rental yields across the 13 cities reached 3.62%. Ahmedabad led with the highest yield at 3.9%, followed by Hyderabad, Kolkata, and Pune at 3.7% each. Chennai saw the largest QoQ yield growth at 21.3%, while Delhi, Hyderabad, and Navi Mumbai reported strong increases at 8.8%, 5.4%, and 5.3% respectively. However, cities like Greater Noida, Gurugram, Kolkata, Mumbai, Noida, and Pune experienced declines in yields as property price growth outpaced rental rate growth.
