CHENNAI: Residential rental markets across the top seven cities have made a strong comeback after offices and schools reopened in 2022. Analysis of the average monthly rental trends across the leading luxury localities in these cities reveal that most markets have seen double-digit growth in the last two years, with only a few exceptions.
As per latest Anarock data, the average monthly rentals in the prominent luxury micro-markets across the top 7 cities surged between 8 and 18% in the last two years. Mumbai’s Worli saw the highest rental growth of 18 per cent in the period – from Rs 2 lakh per month in 2020 to Rs 2.35 lakh in 2022 for luxury homes of minimum 2,000 sq ft area. This was followed by Bengaluru’s Rajaji Nagar, which saw a 16 per cent jump in the same period – from Rs 56,000 in 2020 to Rs 65,000 in 2022.
Meanwhile, capital appreciation in these luxury markets remained in single digits (2-9 per cent) in the last two years. Bengaluru’s Rajaji Nagar witnessed the highest capital appreciation of 9 per cent, with average prices increasing from Rs 5,698 per sqft in 2020 to Rs 6,200 per sq ft in 2022.
Top luxury hotspots – rental vs capital price changes
The luxury residential market has been on an upswing post the pandemic, with its overall sales share growing to about 14 per cent in H1 2022. Even demand for rental luxury properties is on a high, resulting in growth in average monthly rentals.
•Bengaluru, luxury residential hotspot JP Nagar saw avg monthly rentals appreciate by 13 per cent in 2022 over 2020, while capital prices in this period rose by 9 per cent. Likewise, Rajaji Nagar saw rental prices rise by 16 per cent, and capital prices by 5 per cent
•MMR – luxury rentals in Tardeo rose 15 per cent in this period, while capital prices increased by only 3 per cent. Similarly, in Worli, the average monthly rentals for a minimum 2,000 sq. ft. area home increased by 18 per cent, while capital prices saw a mere 2 per cent jump
•NCR – rentals in luxury hotspot Golf Course Road increased by 11 per cent, while capital prices saw a mere 3 per cent rise. Likewise, Golf Course Extension Road saw rentals increase by 12 per cent and capital prices by 5 per cent in this period
•Chennai – luxury rentals in Anna Nagar rose 13 per cent in this period, while capital prices increased by 5 per cent. Similarly, in Kotturpuram, the average monthly rentals rose by 14 per cent while capital prices rose by 4 per cent
•Hyderabad – Jubilee Hills saw avg monthly rentals appreciate by 15 per cent in 2022 over 2020, while capital prices in this period rose 6 per cent. Hitech city saw a rental price rise of 11 per cent, while capital prices rose by 7 per cent
•Pune – the rentals in Koregaon Park rose 14 per cent in this period, while capital prices increased by 4 per cent. In Prabhat Road, the average monthly rentals rose by 8 per cent while capital prices rose by just 3 per cent
•Kolkata – luxury home rentals in Alipore surged 8 per cent in 2022 against 2020, while capital prices increased by 4 per cent. In Ballygunge, the average monthly rentals rose 10 per cent while capital prices rose by 3 per cent.
Residential rental demand skyrocketed across the top cities in 2022 with schools reopening classrooms and most companies calling employees back to offices. Pent-up rental demand hitting the market has caused a demand-supply mismatch in many areas, resulting in monthly rental hikes. Also, post-COVID tenant preference has tilted towards large-size homes. Pre-COVID, average 2-year luxury rental increases at a given time were largely single-digit, 5-7 per cent