Indian Rental Market Surges: Cities See Unprecedented Yield Growth

The Indian rental market reports a 3.62% average gross yield across 13 cities. Chennai and Delhi lead with significant increases, highlighting a favorable turn for investors seeking substantial returns. Secondary cities like Ahmedabad and Hyderabad show notable growth in rental earnings, drawing attention as emerging investment hubs.

The Indian rental market is on an upward trajectory, with the average gross rental yield across 13 major cities reaching an impressive 3.62%, as revealed by a recent Magicbricks report. This marks a critical transition in the real estate sector, with rental yields experiencing notable growth, particularly in cities such as Chennai and Delhi, which have exceeded the national average.

Chennai has reported a staggering 21.3% increase in rental yields quarter-on-quarter, while Delhi observed a commendable 8.8% rise. These statistics reflect a growing confidence within the Indian rental market, enticing investors toward residential properties as viable avenues for better returns.

Prasun Kumar, Chief Marketing Officer of Magicbricks, stated, "For decades, buying homes was primarily for personal use or as a primary residence. However, the current dynamic real estate market is altering that perspective, with residential investments becoming more lucrative. As rental yields rise, we anticipate a surge in buyers exploring multiple property investments, even utilizing loans to facilitate purchases." Surprisingly, the highest rental yields are emerging in cities that have traditionally been overlooked as prime investment destinations.

Cities like Ahmedabad, Hyderabad, Kolkata, and Pune are witnessing robust rental growth, even surpassing established markets like Bengaluru and Delhi. Ahmedabad leads with a 3.9% rental yield, having seen a 16.9% year-on-year increase in average monthly rent, reaching Rs 19.35 per square foot.

With property prices settled at an average of Rs 5,927 per square foot, Ahmedabad has become an enticing location for investors seeking strong rental returns. Hyderabad, another rising star, saw its rental yield escalate from 3.5% in Q2 2024 to 3.7% in Q3 2024. Monthly rents in the city soared by 28.2% year-on-year to Rs 25.17 per square foot, contrasted by a 6.2% year-on-year increase in property prices to Rs 8,188 per square foot. Hyderabad's robust growth is driven by a substantial influx of tenants, stemming from burgeoning job opportunities in the flourishing tech and business sectors.

Meanwhile, Kolkata presents a balanced market, with a rental yield of 3.7%. The city's average rent increased by 12.9% year-on-year to Rs 22.14 per square foot, while property prices witnessed steady growth. Kolkata's allure lies in its affordable living conditions and expanding job market, drawing both investors and tenants. For investors, the current market conditions offer an immense opportunity to capitalize on rental income and property appreciation. (ANI)

(With inputs from agencies.)