Rental Rise

The year 2023 is marked by sgnificant rental appreciation, with millennials and tenants preferring mid-segment rentals, driving the trend.  According to Magicbricks Rental Index Report for the the third quarter, rents across 13 major cities in India soared 22.4% YoY and 4.6% QoQ. This follows a preceding quarter where rents surged by 4.9%.

Based on the behaviour and preferences of over 2 crore customers on Magicbricks platform, the also observed that Thane (57.3% YoY), Gurugram (41.4% YoY), Greater Noida (28.7% YoY), Noida (25.2% YoY) and Hyderabad (24.2% YoY) observed highest appreciation in rent as compared to last year. The report also revealed that millennials (Age 18-34 years) constituted 67% of rental demand across these cities.

According to Sudhir Pai, the CEO, Magicbricks, “The surge in rents reflects a confluence of factors—economic growth, urbanization, and the return to office by companies. High demand, coupled with limited supply has propelled rents, highlighting the evolving landscape of the real estate market. Further, as businesses reinstate in-office work, the need for housing closer to workplaces has also intensified, especially from millennials. However, notable is the slowdown in rent appreciation from the previous quarter, hinting at an expected deceleration in growth over the upcoming quarters as well”.

The report concludes that 41% of the tenants preferred mid segment rentals ranging between Rs 10,000 to Rs 30,000 per month. Further, the market is dominated by semi-furnished units constituting 52.7% of demand and 48.7% of supply. Regarding size wise demand and supply, maximum demand is for units ranging from 1000 to 1500 sq ft, constituting significant 36 percent. Supply also aligns with the demand in the segment accounting for 34.4 percent of the total supply. Demand for units in the range of 500-1000 sq ft has declined considerably from 44 percent to 22 percent., compared to last quarter. In BHK wise demand and supply, 3 BHK units accounted for 40 percent of the total demand, closely followed by 2BHK with 39 percent of demand. In Mumbai Metropolitan Region, 2BHK is the dominant unit type.