According to a report by Anarock, a real estate consultancy firm, Bengaluru has emerged with the highest rental yield in Q1 2024, standing at 4.45 percent. It is closely followed by Mumbai at 4.15 percent and Gurugram at 4.1 percent.
Rising Rental Demand and Yields
The report highlights a significant increase in rental housing demand across major cities, leading to a steady rise in rental yields. Bengaluru’s rental yield has shown substantial growth from 3.6 percent in pre-Covid 2019 to 4.45 percent in Q1 2024, marking a 24 percent increase. Similarly, Mumbai and Gurugram have witnessed growth rates of 19 percent and 17 percent, respectively, during the same period.
Factors Driving Rental Yield Growth
Santhosh Kumar, Vice Chairman of ANAROCK, attributes the surge in rental yields to the post-pandemic rebound in rental demand, especially in IT-dominated cities like Bengaluru, Gurugram, Pune, Noida, and Mumbai Metropolitan Region (MMR). These cities have experienced notable upticks in rental values and consequently, rental yields.
Increase in Rental Values in Prominent Localities
ANAROCK data reveals significant jumps in average rental values in top localities of major cities. In Bengaluru’s Sarjapur Road and Whitefield, average monthly rents have surged by 8 percent each in Q1 2024 compared to the previous quarter. Similarly, Noida’s Sector 150 witnessed a 9 percent increase, while Delhi’s Dwarka saw a 6 percent rise.
City-wise Rental Growth
In Mumbai, Chembur and Mulund observed a 4 percent growth in rental rates, with Chembur registering an average monthly rental of approximately Rs 62,500 in Q1 2024. Kolkata’s Rajarhat recorded the lowest increase at 3 percent, while Chennai and Mumbai experienced a 4 percent rise. Hyderabad’s prominent localities like HITECH City and Gachibowli witnessed a 5 percent increase in rents during the quarter.
Conclusion
The surge in rental yields and values across major Indian cities reflects the resilience of the real estate market, particularly in the wake of the Covid-19 pandemic. The robust demand for rental properties underscores the importance of real estate as a stable investment avenue in India’s evolving urban landscape.
