As homebuyers increasingly look at residential realty as an income-generating asset, this festive season, rental yield will be the strongest motivating factor for them to invest in residential real estate.  

That rental income is emerging as a key consideration in residential real estate investment, is established by the latest Housing Sentiment Index Report of Magicbricks.  Buyers who cite rental yield as their primary investment motivation record the highest Housing Sentiment Index (HSI) of 119. The findings point to a shift in investment preferences, with buyers increasingly evaluating residential property for its income-generating potential alongside traditional motivations such as capital appreciation and ownership.

About one-third homebuyers cite capital gains and ownership stability as reasons for investing in residential realty, rental yield-focused buyers display the strongest housing sentiment. The HSI for this segment stands at 119, compared with 115 among buyers motivated by capital gains and 110 among those prioritising stability, ownership or an upgrade. This indicates stronger confidence among buyers evaluating property for its income potential.

The growing yearning for rental income is attributed to the improvement in residential rental yields which have increased from nearly 2 percent to around 3.6 percent over the past five years, brightening the appeal of residential property as an asset capable of generating recurring cash flows while offering potential for long-term value appreciation. This investment-led demand is particularly visible among second-home buyers. Under-construction properties record an HSI of 129, compared with 116 for ready-to-move-in homes due to comparatively attractive entry prices, and the opportunity to benefit from price appreciation as projects progress towards completion.