Rental rates in key micro markets across top cities witnessed a modest 2-4% quarterly increase in the second quarter of 2024, marking a stark contrast to the robust 4-9% growth seen in the first quarter, according to a report by Anarock.
Santhosh Kumar, vice chairman of Anarock Group, attributes this shift to the influx of new housing supply into the markets. "In India, the second quarter typically sees heightened rental growth due to factors like the beginning of the academic year and new job placements. However, this year, the surge in housing supply has moderated the rental price spikes observed in recent years."
Bengaluru, Noida Lead In Quarterly Growth
Bengaluru's Whitefield and Noida's Sector 150 emerged as the frontrunners, with a 4% quarterly growth each in Q2 FY24, compared to the previous quarter. This follows a more vigorous 8% and 9% increase respectively in Q1 FY24.
The top seven cities in India are set to witness the completion of approximately 5.31 lakh housing units in 2024, marking a 22% increase from the previous year's deliveries. Mumbai Metropolitan Region leads the pack with an estimated 1.61 lakh units slated for completion in 2024, followed by NCR with 1.44 lakh units.
City-Wise Rental Trends
Bengaluru: Average rents in Whitefield rose from Rs 32,500 per month in Q1 FY24 to Rs 35,000 per month in Q2 FY24, showing moderate growth compared to earlier quarters.
Noida: Sector 150 saw a quarterly increase from Rs 24,000 per month to Rs 25,000 per month in the same period, indicating a similar slowdown in rental escalation.
MMR: Areas like Chembur and Mulund saw a 2% rise in rents in Q2 FY24, contrasting with higher increases in previous quarters.
The slowdown in rental price growth aligns with broader market trends driven by increased housing availability. This shift is expected to stabilise rental markets, making housing more affordable for tenants while providing a more balanced growth environment for real estate developers, the report noted.
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