IT hubs push home rent in India up 30% in first 9 months of 2023: Anarock

The highest jump in home rent of 31% was recorded in the Whitefield region in Bengaluru

Led by IT hubs, the home rent in the top seven cities in India rose 30 per cent in the first nine months of 2023 as compared to the same period last year, according to data shared by real estate consultancy Anarock on Thursday. The highest jump in rent was seen in Bengaluru, Hyderabad and Pune.

The highest jump in home rent of 31 per cent was recorded in the Whitefield region in Bengaluru. It was followed by 27 per cent in Sarjapur Road, Hyderabad, and 24 per cent in Gachibowli, Hyderabad. The top seven cities for the data are Bengaluru, Hyderabad, Pune, National Capital Region (NCR), Mumbai Metropolitan Region (MMR), Kolkata and Chennai.

In Pune, the surge in rent was led by an 18 per cent jump in the Wagholi area. 

"After an almost terminal downturn during the first and second Covid-19 waves, residential rents are one of the most remarkable comeback stories of the post-pandemic housing sector," said Anuj Puri, chairman at Anarock Group.

"Bengaluru, already in the limelight for its astronomic rental values post-Covid-19, continues to stand out among the top 7 cities. The fact that the next two hotspots for rental values growth are also IT/ITeS-centric cities also underscores the fundamental strength of the Indian Infotech sector, despite belt-tightening moves in the industry."

In terms of rental yield - annual return on capital invested in a property - Bengaluru topped the list. It reported a rental yield of 4.35 per cent at the end of the September quarter. It was followed by 4.05 per cent in Mumbai and 4 per cent in Gurgaon. 

The yield was higher than the 3 per cent recorded before the Covid-19 pandemic.

Currently, the rent in Indian cities has stabilised as hiring remains low in the last quarter of the calendar year. But they are expected to pick up in the first quarter of 2024. 

"Rents will once again build up steam when renting picks in the January to March period," Puri said. "This is when Indians usually relocate for better job opportunities amid increased hiring in the new financial year."