Rental Bengaluru hotspots like Whitefield & Sarjapur Road see 31% & 27% rental growth respectively in past nine months of 2023 (for a standard 2BHK of 1,000 sq. ft. area)
Hyderabad’s top areas – Gachibowli & HITECH City – see 24% & 16% growth respectively in 9M 2023
IT hubs Bengaluru, Hyderabad & Pune dominate rental surge across top 7 cities in 2023
Pune’s Wagholi sees 18% avg. monthly rental growth in Jan-Sept. 2023; Hinjewadi sees 17% growth in the period
At 4.35%, Bengaluru has the highest rental yield as of Q3 2023-end among all major cities, followed by Mumbai with 4.05%

Housing rents continue to soar across the top 7 cities, led by leading IT/ITeS hubs Bengaluru, Hyderabad, and Pune. Latest ANAROCK Research data reveals that among the top 7 cities, residential rentals in Bengaluru’s prominent areas soared by over 30% in the first nine months of 2023 (9M 2023).

A standard 2BHK flat of approx. 1,000 sq. ft. area in Bengaluru’s Whitefield saw rents grow by 31% in 9M 2023, followed by Sarjapur Road where rents for such homes rose by 27% in this period.

In hard numbers, average monthly rent for a standard 2BHK home of 1,000 sq. ft. at Whitefield increased from INR 24,600/month by 2022-end to INR 28,500/month by September-end 2023. At Sarjapur Road, average monthly rents increased from INR 24,000/month in 2022-end to INR 30,500/month in September 2023.

Interestingly, the next two rental growth hotspots are also IT/ITeS hubs. Hyderabad witnessed the 2nd-best rental value growth with key markets in the city seeing up to 24% growth in this period against all prominent localities in the top 7 cities of India.

In HITECH City, the average rents stood at INR 24,600/month by 2022-end; by the end of Q3 2023, they were INR 28,500/month – a 16% growth in the nine-month period. Gachibowli saw rents zoom up by 24% in the same period – from INR 23,400/month by 2022-end to INR 29,000/month by September-end this year.

The third prominent city to see good rental values growth was Pune, where the Hinjewadi micro-market recorded a rental value growth of 17% in the last nine months. Here, the average rents were INR 21,000/month by 2022-end and INR 24,500/month by September-end 2023.

Anuj Puri, Chairman – ANAROCK Group, says, “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. The first nine months of 2023 saw housing rents soar by over 30% in the top 7 cities. 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/ITeScentric cities also underscores the fundamental strength of the Indian Infotech sector,

despite belt-tightening moves in the industry.”

However, we may now see rental values begin to stabilize in most cities in the ongoing quarter as renting usually remains low in the last quarter of the year, says Puri. “Rents will once again build up steam when renting picks in the January to March period,” he says. “This is when Indians usually relocate for better job opportunities amid increased hiring in the new financial year.”

Avg. Rent for standard 2BHK unit of 1,000 sq. ft. area (INR/month)
Cities	Micro Markets	2022-end	9M 2023	% Change (2022 vs 9M 2023)
Bengaluru	Sarjapur Rd	24,000	30,500	27%
Whitefield	22,500	29,400	31%
Hyderabad	HITECH City	24,600	28,500	16%
Gachibowli	23,400	29,000	24%
Pune	Hinjewadi	21,000	24,500	17%
Wagholi	17,000	20,000	18%
NCR	Sohna Road	28,500	31,500	11%
Sector-150 (Noida)	19,000	21,500	13%
Dwarka	22,000	25,000	14%
MMR	Chembur	51,000	58,000	14%
Mulund	41,000	44,500	9%
Kolkata	EM Bypass	22,000	25,000	14%
Rajarhat	16,500	18,000	9%
Chennai	Perambur	18,000	19,700	9%
Pallavaram	17,000	19,000	12%

Source: ANAROCK Research

Top Rental Markets

Besides Bengaluru, other cities also recorded notable rental values growth in their prominent localities:

In Hyderabad, the top markets were HITECH City and Gachibowli, which saw rental values increase by 16% and 24%.
In Pune, the two standout markets with high rental growth between 2022-end and Sept.-end 2023 are Hinjewadi and Wagholi, which witnessed 17% and 18% growth, respectively.
In Chennai, the top markets to witness high rental values growth are Pallavaram and Perambur, with rents in this period growing by 12% and 9% respectively.
In NCR, the top 3 markets were Sohna Road in Gurugram (rental values up by 11%), Sector-150 in Noida (13% growth) and Dwarka in Delhi (14% growth).
In MMR, the top two markets to see rental value increases were Chembur and Mulund, which saw 14% and 9% growth, respectively.
Kolkata’s top two markets for high rental value growth in 9M 2023 were EM Bypass and Rajarhat, which saw 14% and 9% growth, respectively.

Rental Yields

Residential rental yield – the annual ROI from capital invested in a property – has never been spectacular in India. The national average of 3% for the last few years before the pandemic was more or less par for the course. However, with rental demand picking up after Covid-19 in 2022, there has been a considerable change – one of the main reasons why investors are back on the housing market.

Among the top 7 cities, Bengaluru has the highest rental yield of 4.35% as of September 2023-end, followed by Mumbai with 4.05%. Pre-Covid in 2019, the rental yield in Bengaluru was at 3.6% – the highest back then, as well.

	Rental Yield (in %) Across Top Cities
Cities	2019	2020	2021	2022	2023	Q3 2023end
Gurgaon	3.5	3.4	3.5	3.7	3.8	4
Noida	3.2	3	3.1	3.4	3.45	3.6
Greater Noida	2	2	2.3	2.8	2.8	2.95
Delhi	2.2	2.1	2.3	2.6	2.65	2.8
Pune	3.3	3.1	3.2	3.5	3.6	3.75
Bangalore	3.6	3.4	3.5	3.9	4.1	4.35
Mumbai	3.5	3.3	3.5	3.8	3.9	4.05
Navi Mumbai	2.8	2.6	2.7	3.2	3.25	3.35
Thane	2.7	2.5	2.6	2.9	3	3.15