Rental housing stabilises in Q3 2025 as demand-supply moderates: Report

India's rental housing market entered a consolidation phase in July-August 2025, with modest demand and supply growth pointing to a more balanced environment

Top Indian cities saw a phase of consolidation in the rental housing market during July–August 2025 (Q3 2025), with moderation in both demand and supply steering the sector toward a more stable rhythm, according to a report by Magicbricks, a real estate services portal.

 

National rental housing demand rose by 0.2 per cent quarter-on-quarter (QoQ) and 0.4 per cent year-on-year (YoY) in Q3 2025, while supply increased by 0.6 per cent QoQ and 5.9 per cent YoY, indicating a closer alignment between tenant interest and available inventory, the report said.

 

“The moderation in rents across most cities also indicates a healthy shift toward balance, where supply is catching up with demand. This phase is likely to improve affordability for tenants while creating a more predictable environment for homeowners and investors,” said Prasun Kumar, chief marketing officer, Magicbricks.

 

The market is resetting after three quarters of strong activity. Even so, average rents continued to firm up, rising 4.4 per cent QoQ and 18.1 per cent YoY, as major metros experienced varied levels of tenant activity through the quarter.

 

Delhi–NCR led the quarter’s movement, with demand surging in Greater Noida (29.5 per cent QoQ), Delhi (17.8 per cent QoQ) and Noida (10.8 per cent QoQ). Kolkata also posted a 5.4 per cent QoQ rise in demand.

 

“While the national rental market has begun to stabilise after several quarters of rapid growth, the continued momentum in NCR shows how infrastructure upgrades, better connectivity and a steady flow of mid-sized homes are sustaining tenant interest,” Kumar added.

 

By contrast, several major cities — including Chennai, Bengaluru, Hyderabad, Pune and Mumbai — saw softer trends, with demand declining between 1.2 per cent and 7.2 per cent QoQ. On the supply side, Delhi registered the sharpest jump at 17.6 per cent QoQ, followed by Ahmedabad at 6.5 per cent.

 

Thane posted a sharp increase in average rent at 12.5 per cent QoQ, followed by Chennai at 6.7 per cent QoQ, Mumbai at 4.9 per cent QoQ and Delhi at 4.5 per cent QoQ.

 

Nationally, two-bedroom homes accounted for 44 per cent of rental demand, followed by one-bedroom units at 32 per cent. Semi-furnished homes dominated with 51 per cent of demand and 54 per cent of supply, while mid-sized units between 500 and 1,500 square feet captured 77 per cent of tenant preference.