Capital appreciation steals a march on rental growth in key markets

NCR, MMR, Hyderabad see higher capital appreciation between 2021 and 2024, says Anarock report

Capital value appreciation outpaced rental value growth in several key micro-markets between 2021 and 2024, with Noida Sector 150 in the National Capital Region (NCR) leading the pack with a 128 per cent rise in capital values compared to rental value growth of just 66 per cent, according to a report by property consulting firm Anarock.

 

With the increasing migration of Indians to urban centres, the question of buying versus renting homes looms large for homebuyers. While each option has its advantages, recent data from Anarock reveals that capital values have appreciated at a faster rate than rental values in several key markets across India’s top seven cities over the three years.

 

According to the report, capital values on NCR’s Sohna Road rose by 59 per cent, compared to a 47 per cent increase in rental values.

 

In the Mumbai Metropolitan Region (MMR), capital values in Chembur and Mulund grew by 48 per cent and 43 per cent, respectively, while rental appreciation was lower at 42 per cent and 29 per cent.

 

Similarly, Hyderabad Information Technology and Engineering Consultancy City (HITEC City) and Gachibowli saw a similar trend, with rental value growth trailing capital appreciation.

 

While average capital values rose faster than rental values in NCR, MMR, and Hyderabad, the reverse trend was observed in Pune, Kolkata, and Chennai. 

 

In Pune’s Hinjewadi, rental values appreciated by 57 per cent, compared to a 37 per cent rise in capital values.

 

Similarly, capital appreciation in Kolkata’s Eastern Metropolitan Bypass was just 19 per cent between the end of 2021 and the end of 2024, lower than the 51 per cent rental value growth over the same period.

 

In Kolkata’s satellite city Rajarhat, too, rental values grew by 37 per cent, outpacing capital appreciation of 32 per cent over the period.

 

Commenting on the divergence between capital appreciation and rental growth in these areas, Anuj Puri, chairman of Anarock group, said that home ownership is becoming more lucrative in key markets where property values are rising faster than rental yields.

 

“For investors, this suggests strong long-term returns in Noida, Hyderabad, and MMR, where capital appreciation outpaces rental growth,” he added.

 

Cautioning investors to align their strategies with location-specific trends, Puri added that those looking for long-term capital appreciation should target markets with high appreciation, while rental-focused investors should focus on localities where rents are rising steadily.

 

“For homebuyers, it is extremely important to weigh property price trends against rental growth to understand whether buying or renting makes more financial sense in each location,” he said.