In 2024, the number of young, single, employed people in India who require rental properties is expected to soar, mainly because of the influx of people who had been working from home during the COVID-19 pandemic.
While little over 64% of renters in India intend to purchase a home during the next four years, 36% would rather stay in their current rental rather than make the investment. These are the statistics for the housing rental sector in India.
Regardless of whether you have visited India previously or have lived there your entire life, you should always do your homework before deciding because there is a wide range of interests and price points represented in the rental market. The primary topic of the article is the rental patterns for India’s top cities in 2024.
The Rental Rise
The increase in rental prices in India’s most desirable cities is not an accident; rather, it is an example of the fundamental factors influencing the evolution of the real estate industry. Property prices have risen by an astounding 15–20% since the pre-pandemic period, driven by tighter monetary policy and rising home loan rates.
Remarkably, 59% of respondents to a biannual consumer mood survey expressed a significant preference for recently built, move-in ready homes. But the harsh truth still stands: just 21% of the available inventory fits into this desired category. The mismatch between supply and demand, which is particularly noticeable in desirable areas close to core business districts, is driving up rental prices and causing a notable increase in monthly asking rentals.
Tenant Information
How old do you anticipate the typical tenant will be when you have a house to rent? A survey of the rent market indicates that 32% of tenants or renters are between the ages of 25 and 35. Tenants most frequently fall into the young, or the age group between 18 and 25. The age categories of 35 to 45 and 45+ saw a decrease in the number of renters. Here, the trend is gradually moving from renting to buying. Merely 16% of tenants are in the 35–45 age range, while 15% are older than 45.
How Do They Rent Out?
Websites and rental apps are used by people for practically everything, including renting houses. Renters have access to thousands of options and direct communication with landlords through online portals like Lets Rentz. Finding a property becomes much easier and faster this way than having an intermediary handle the communication.
It is also evident that seasoned tenants favour using friends and family as a source while looking for a place to call home. They even make the effort to visit residences that have a board visible. People no longer see the value in paying brokers the exorbitant fees they do, as seen by the substantial drop in the need for broker services.
43% of tenants in Bangalore, 43% in Mumbai, and 40% in Chennai do not select broker services. From 33% of each previous year, these figures have increased. This can be as a result of the numerous possibilities and financial savings that come from exploring other options.
Understanding from the Data
Analysing the data reveals a remarkable story of development and resiliency. The Housing.com IRIS index, which monitors online search trends in major real estate markets and serves as a gauge of high-intent search volume, reveals an important trend: starting in 2022, the rental index has continuously surpassed the buy index, reaching an astounding 23-point gap by the end of 2023.
This increase in demand for rentals is not merely an anomaly in statistics; rather, it is a real phenomenon that has caused monthly asking rents to rise quickly. Particularly, areas close to business centres in places like Hyderabad, Bengaluru, and Gurugram have seen rent increases of 55–60% over pre-pandemic levels, indicating a significant change in rental preferences and market dynamics.
Trends in the Bengaluru Rental Market
Bengaluru leads without competition because of its robust IT sector, which drives up demand for rental homes. In 2024, Bengaluru, the IT capital of India, will have a highly hot real estate market. The return to office premises following the epidemic is one of the factors contributing to the rise in demand. Due to the employers’ recall of its IT workers, there is a greater demand for rental homes.
Certain areas of Bengaluru might see value increases that are currently more than reasonable. You should be aware that in the quarter leading up to 2024, the prices of a typical 2BHK flat over Sarjapur Road and Whitefield increased by 8% in some locations alone.
Rental Market Trends in Kolkata
Following the epidemic, the IT sector’s need is driving the rental housing market in Kolkata. Because there aren’t enough apartment buildings in the regions of New Town, Rajarhat, and Garia, rents have increased dramatically. In comparison to all other major cities, Kolkata, the city-state, has a 3.8% rental yield, according to data from Anarock.
New Town, Dum Dum, Tollygunge, Garia, Rajarhat, and Joka are a few of the top neighbourhoods in Kolkata with the highest return on investment.
Trends in Chennai’s Rental Market
Rental prices, which have been rising consistently in the city for the last few years, have grown somewhat slowly recently. As a result, Chennai’s average rental value grew by about 7% between 2018 and 2024.
Virugambakkam, Anna Nagar, Thiruvanmiyur, T Nagar, Vadapalani, Ashok Nagar, KK Nagar, West Mambalam, Valasaravakkam,, and Adyar are the areas with the highest rental returns.
Hyderabad Rental Market Trends
Due to the fact that most jobs become available and new students are admitted to universities and colleges around this time, rent increases are often higher in the second quarter.
The average rent increase in Hyderabad’s rental market for the second quarter of 2024 was 3%, a decrease from the 5% increase noted in the first quarter.
Among the top communities with strong rental returns are Gachibowli, Kukatpally, Madhapur, Kondapur, Manikonda, Miyapur, Banjara Hills, Jubilee Hills, and Hitech City.
Delhi NCR Rental Market Trends
Dwarka in Delhi had a 6% increase in rent, while Sector 150 in Noida, which is part of the NCR, witnessed a 9% increase.
The central business district (CBD) was the most expensive area in the Delhi-NCR region of India for the month ending on March 31, 2024, with average rentals at roughly 319.8 Indian rupees per square foot per month. Office rentals are in high demand.
In Delhi NCR, Saket, Uttam Nagar, Dwarka, Lakshmi Nagar, Mayur Vihar, and Vasant Kunj in particular are among the most sought-after neighbourhoods for rent.
Trends in the Housing Rental Market
As more housing supply enters the markets of the top cities, overheated rental prices are starting to level off. Residential rentals in significant micro markets in large cities grew by 2-4% in Q2 2024 as opposed to 4-9% in Q1 2024, according to statistics made public by a market source. Increased housing availability may affect the patterns of the rental housing market.
The latest ANAROCK data indicates that rental cost increases in the top seven cities across Indian marketplaces are trending lower. The data indicates that there was a 2–4% increase in average residential rental prices in these cities’ major marketplaces during the second quarter of 2024 compared to the prior quarter.
Trends in the Apartment Rental Market
The following information relates to trends in apartment rental rates in 2024:
When looking for a home, more than 43% of tenants utilise real estate websites. It provides a more impartial and independent experience. A solid increase of more than 35% from the previous year. Similar to last year, 32% of respondents said that they found a place to live through friends and family. Twelve percent of tenants said they look for a home on to-let boards. Broker services are only used by 13% of tenants.
You can try Lets Rentz if you’re looking to move or find a nice tenant for your house. Visit us today to see our thousands of options and renters, and let us know how we can help.