After a double digit increase, rents in metro cities set to rise even higher

Rentals across India's top cities are skyrocketing. With more companies calling their employees back to office, rental demand has gone through the roof after it plunged during the pandemic.

A recent Anarock report says that housing rentals are further likely to go up this year. As per the report, key residential rental hotspots went up by as much as 23% between 2019 and 2022.

As per the Anarock report, houses of 2,000 sq. ft. area in Bengaluru saw rents going up by 16% from 2019 to 2022. The rent for a 1,000 sq.ft.area house jumped upto 18% in the same period.

In fact, some reports suggest that rents in India's technology hub Bengaluru have nearly doubled since the start of 2022. Reportedly, renters in the city are going on a bidding war to get a roof over their heads. A report by No.broker.com shows that the rents in Bengaluru have gone up by 40%.

Mumbai, India's financial capital also saw rents rising. Among all the localities in the top 7 cities, Mumbai's Worli saw the highest growth of 18% for a luxury apartment. The average rent for a 2,000 sq.ft. home increased from Rs 2 lakh in 2020 to Rs 2.35 lakh in 2022. Similarly, a 1,000 sq.ft.area house saw an increase in rent of upto 13%.

Coming to Delhi-NCR, Noida's Sector-150 has remained at the top with the average monthly rental increasing 23% from Rs 15,500 to Rs 19,000 per month for a 1,000 sq.ft.home. NCR's Sohna road and Dwarka also saw rent rising 14% and 13% respectively. Luxury homes in Golf Course Extension Road had an average rental growth of 18% from Rs 49,000 to Rs 58,000.

Chennai, too witnessed a spike in rents. The rents of luxury apartments with 2,000 Sq.ft.area rose by up to 14%. Anna Nagar's average rent rose by 13% from Rs 56,000 per month to Rs 63,000 per month. Meanwhile, Kotturpuram's rent was hiked by 14% from Rs 74,000 to Rs, 84,000 per month. A 1,000 sq.ft.home in Chennai saw an average monthly rental hike of 17%.

While, prominent rental markets had double-digit rental growth between 2019 to 2022 for a 1,000 sq.ft.area, Hyderabad was an exception. As per Anarock data, key areas like Gachibowli and HITECH City recorded single-digit growth of 6% and 7%, respectively. Meanwhile, Hyderabad’s Jubilee Hills luxury apartments (2,000 sq.ft.area) witnessed 17% jump in the same period from Rs 54,000 per month in 2019 to Rs 63,000 per month.

Anarock Chairman Anuj Puri earlier said "the current surge in the demand for rental accomodations is due to more offices opening up, consumers refraining from buying properties, as both property prices and interest rates continue to rise."

"As we move into 2023, the rental market in metro cities remains highly competitive, with strong demand for housing and limited supply of available units. We have seen a substantial increase in rental rates over the past few years, and anticipate that this trend will continue into 2023, with rental rates rising by an additional 8-10% on average",said Prerna Rawat, Property Consultant at Prerna and Company.

Meanwhile, some experts are of the opinion that rising layoffs in the tech industry, could lead to rental depreciation.