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The Indian rental market witnessed a 7.4% quarter-on-quarter (QoQ) rise in Q3 2024, with average rents hitting INR 35.8 per square foot, according to Magicbricks' latest report. Chennai saw the sharpest increase at 22.2%, followed by Delhi and Thane with 11.4% and 10.9% growth, respectively. Mumbai remained the most expensive rental market at INR 86.50 per square foot. Despite rental demand rising by 2%, supply declined by 6.7%, creating a demand-supply imbalance. Gross rental yields averaged 3.62%, with Ahmedabad leading at 3.9%, reflecting strong urban housing demand.
The rental markets in 13 major Indian cities recorded a 7.4% quarter-on-quarter (QoQ) increase in average rents during Q3 2024 (July-September), reaching INR 35.8 per square foot per month, the steepest rise in two years, according to Magicbricks' latest Rental Update. Advertisement
Chennai led the surge with a staggering 22.2% QoQ increase, as average rents rose from INR 17.94 per square foot in Q2 to INR 26.91 per square foot in Q3. Delhi and Thane followed closely, recording 11.4% and 10.9% QoQ growth, with average rents climbing to INR 37.55 and INR 33.10 per square foot, respectively. Mumbai retained its position as India's most expensive rental market, with an average rent of INR 86.50 per square foot, far outpacing other cities like Delhi and Navi Mumbai at INR 37.55 and INR 33.83, respectively.
Emerging markets such as Greater Noida (INR 15.48 psf), Noida (INR 21.32 psf), and Kolkata (INR 22.14 psf) remained the most affordable options for renters. However, the report noted a persistent demand-supply imbalance, with rental demand increasing by 2% in Q3 after a 14.8% rise in Q2. Supply, meanwhile, declined by 6.7% during the same period, pushing rents higher across the board.
Gross rental yields averaged 3.62% across these cities, with Ahmedabad leading at 3.9%, followed by Hyderabad, Kolkata, and Pune at 3.7% each. Chennai recorded the largest QoQ yield growth at 21.3%, reflecting strong rental demand. Conversely, cities like Greater Noida, Gurugram, and Mumbai saw declines in rental yields as property price growth outpaced rent increases.
The report attributes rising rents to the shrinking supply of rental properties and robust demand driven by urban migration and economic growth. As cities like Chennai and Delhi witness sharp increases, tenants are grappling with affordability challenges, while landlords benefit from higher returns on rental properties. The trend underscores the growing need for balanced rental housing supply to meet demand and stabilize rates.
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