Top Indian Cities See 50% Drop In Rental Growth As Housing Supply Rises
Among the top 7 cities, MMR is slated to see the highest completions at approx. 1,60,900 units in 2024. (Representative image)
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.
With more supply hitting the top 7 cities’ markets, overheated housing rents are stabilising. 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.
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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.
Santhosh Kumar, vice chairman, Anarock Group, said, “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.”
Average rents for a standard 1,000 sq.ft. 2 BHK in Bengaluru’s Whitefield rose by 4% – from Rs 32,500/month in Q1 2024 to Rs 35,000/month in Q2 2024 to date. In Q1 2024, the quarterly jump against Q4 2023 was double at 8%.
A Quick Look
- Average rents in Noida’s Sector 150 rose by a mere 4% – from approx. Rs 24,000/month in Q1 2024 to approx. Rs 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 average rents rose 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 average rents rise by 3% each in Q2 2024 to date over the preceding quarter. In Q1 2024, the quarterly average rent hike in both these markets was 5%.
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,” said 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.
