Rental Price Growth Drops 50% In Top Cities as Housing Supply Surges

 Mumbai 19 June 2024: With more supply hitting the top 7 cities‘ markets, over-heated housing rents are stabilizing. Latest ANAROCK data shows that average residential rental prices across key markets in these cities saw a 2-4% quarterly rise in Q2 2024 to date over the preceding quarter. Q1 2024 saw rents in these markets rise by between 4-9% quarterly against Q4 2023.

Santhosh Kumar, Vice Chairman – ANAROCK Group, says, “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.”

The top 7 cities are set to deliver approx. 5.31 lakh new units in 2024 while in 2023, these cities saw approx. 4.35 lakh units hit their markets. This denotes a 22% annual supply increase this year if delivery schedules remain on track.

Average rents for a standard 1,000 sq.ft. 2 BHK in Bengaluru’s Whitefield rose by 4% – from INR 32,500/month in Q1 2024 to INR 35,000/month in Q2 2024 to date. In Q1 2024, the quarterly jump against Q4 2023 was double at 8%.

A Quick Look

  • Avg. rents in Noida’s Sector 150 rose by a mere 4% – from approx. INR 24,000/month in Q1 2024 to approx. INR 25,000/month in the current quarter. The quarterly hike stood at 9% in Q1 2024 against Q4 2023. Sohna Road and Dwarka saw their respective quarterly rents increase by 3% and 2% in Q2 2024; in Q1 2024, the hikes stood at 4% and 6% respectively.
  • MMR’s key markets Chembur and Mulund saw avg. rents rise by just 2% against the preceding quarter (Q1 2024); in Q1 2024, they rose by over 4% against Q4 2023.
  • Hyderabad’s HITECH City and Gachibowli saw avg. rents rise by 3% each in Q2 2024 to date over the preceding quarter. In Q1 2024, the quarterly avg. rent hike in both these markets was 5%.

Cities

Micro Markets

2023-end

Q1 2024

Q2 2024

Bengaluru

Sarjapur Rd

31,600

34,000

35,000

Whitefield

30,200

32,500

33,700

Hyderabad

HITECH City

31,000

32,500

33,500

Gachibowli

30,500

32,000

33,000

Pune

Hinjewadi

25,600

26,500

27,000

Wagholi

20,600

22,000

22,700

NCR

Sohna Road

32,700

34,000

35,000

Sector-150 (Noida)

22,000

24,000

25,000

Dwarka

25,800

27,400

28,000

MMR

Chembur

60,000

62,500

63,500

Mulund

46,500

48,500

49,700

Kolkata

EM Bypass

25,600

27,000

27,800

Rajarhat

18,500

19,000

19,500

Chennai

Perambur

20,200

21,000

21,600

Pallavaram

19,500

20,300

20,800

City-wise Completions in 2024

“ANAROCK data indicates that approx. 5,31,470 units are expected to be completed in 2024 across the top 7 cities, provided there are no delivery delays,” says Santhosh Kumar. “In 2023, approx. 4,35,045 units were completed in these cities.”

Among the top 7 cities, MMR is slated to see the highest completions at approx. 1,60,900 units in 2024. In 2023, the region saw approx. 1,43,500 units completed

  • NCR is expected to see approx. 1,44,315 units delivered in 2024, against approx. 1,14,280 units in 2023.
  • Pune is expected to see approx. 97,000 units completed in 2024. In 2023, approx. 65,000 units were completed here.
  • Bengaluru, the key rental hub with the highest rental value hikes, will see approx. 51,685 units delivered in 2024, against approx. 52,565 units in 2023.
  • Hyderabad is slated to see approx. 34,770 units completed 2024-end; in 2023, approx. 20,500 units were completed.
  • Kolkata is expected to see approx. 25,220 units delivered in 2024. In 2023, approx. 25,075 units were completed here.
  • Chennai will see the delivery of approx. 17,580 units in 2024, against 14,125 units in 2023.