House rentals increase 4.9% in June quarter: Magicbricks report

The rental housing sector in India's top 13 cities continued to expand during the April-June period, with a notable 4.9% quarter-on-quarter increase in average rent, as per the the recent Magicbricks rental index.

The surge in demand outpaced supply growth, as the report outlines an 18.1% sequential rise in demand compared to a 9.6% increase in supply.

The analysis, which drew insights from the behavior and preferences of over 20 million users on the Magicbricks platform, identified distinct trends among various cities.

Bengaluru witnessed an 8.1% surge in rents, Navi Mumbai experienced a 7.3% uptick, and Gurgaon saw a 5.1% increase. On the other hand, Delhi and Mumbai saw marginal sequential declines of 0.9% and 0.1% in rents, respectively.

Magicbricks Chief Executive Sudhir Pai attributed the surge in rental demand over the past year to returning employees and students. The re-establishment of in-person work culture prompted the need for housing near workplaces. Similarly, the resumption of in-person education drew students back to city centres, further amplifying housing demand.

The report points out that as property values soared, homeowners opted for profitable property sales rather than rentals, leading to reduced supply. Coupled with heightened demand, this trend contributed to increased rents in key urban centres.

A consistent favourite, 2-BHK units dominated both demand and supply, commanding a 53% share. Following closely were 1-BHK apartments at 27%, and 3-BHK units at 18%. Interestingly, the demand for 3-BHK units declined from 36% in the previous quarter to 18%, reflecting a growing preference for compact living spaces. In contrast, the demand for 1-BHK units surged from 17% to 27%.

The report also highlighted affordability as a significant driver of demand in this quarter. Tenants primarily favoured rental accommodations with monthly rents ranging between ₹10,000 and ₹20,000. This preference was primarily observed within units spanning 500 to 1,000 sq ft of covered area.

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