National Capital Region has emerged as a front-runner in residential rental increase across India, with both Gurugram and Greater Noida emerging as the major drivers.

According to a recent rental report for the last quarter of the calendar year 2023, by Magicbricks, there was a robust 17.4 percent YoY surge in rents across 13 major Indian cities, with NCR taking a dominant position.  Gurugram, Greater Noida and Bengaluru emerged as the top 3 destinations registering highest surge in rents. Gurugram saw 31.3 percent YoY increase followed by  Greater Noida clocking 30.4 percent yearly increase while  Bengaluru occupied third spot with 23.1 percent YoY rental growth. The report also sighted that rents increased 1.6% QoQ, following an increase of 4.6 percent QoQ between July and September 2023.

Based on the preference of over 2 crore customers on the Magicbricks platform, the report further observed that the rental demand increased modestly by 1.6 percent YoY. Greater Noida with 6.9 percent  YoY increase, Ahmedabad with 6.6 percent YoY growth, and Chennai with 4.1 percent YoY increase observed the highest growth in rental demand. Concurrently, rental supply reduced considerably by 16.9 percent YoY with outliers like Noida  (19.6 percent  YoY)  , Hyderabad ( 3.2 percent YoY) and Greater Noida  ( 2.7 percent YoY), demonstrating an increase in rental supply.

Explaining the rental dynamics, Abhishek Bhadra, Head of Research, Magicbricks, elaborated, “In 2023, the economic expansion, thriving job markets, rising disposable incomes, and a migration influx to Tier 1 cities increased rental demand substantially. Simultaneously, rental supply reduced, possibly as interest rates surpassed rental yields, deterring investors and property owners to participate in the rental housing market”

Between October and December 2023, there was a cyclical dip in the rental demand. However,  a rebound in the short to medium term is anticipated, underscoring the dynamism of the rental market.

Talking of the trends, millennials are the major drivers of a home rental surge. According to the report,  millennials in the age group of  18-34 years,  constituted 67 percent of rental demand. Considering the trends related to home configurations,  2 BHK units dominated the rental market, commanding 41percent of the rental demand in these cities.

The report also touched upon demand and supply trends. It reveals that the dominant demand and supply was in a budget rent accommodation. Close to seventy-seven percent of demand and close to 67 percent of supply lies in the range of Rs 10000 to Rs 30000 per month, making it the most preferred range in the rental market.